Australia's house price decline to be shallow

What you need to know today.

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Good morning, it's Georgie here in Sydney. Here's what you need to know today. Today's must-reads: • Australia housing downturn could be short lived • Buyout firms target slice of Australia's pensions system • Hedge funds load up on Aussie dollar short bets

What's happening now

Australia's housing market downturn is likely to be "shallow and short-lived," though it's hard to see growth returning until home affordability improves, according to CoreLogic.  On Bloomberg TV's Australia Ahead Ray White Chief Economist Nerida Conisbee says that Australia's housing market may continue to cool this year, but three factors should prevent any more significant drop in house prices. Australia's compulsory A$4 trillion pension system is helping to spark fresh interest from private equity firms including KKR & Co. and Bain Capital as they seek to tap into one of the world's fastest-growing money management industries. CC Capital Partners, set up by a former Blackstone dealmaker, became the latest buyout firm to target the sector with a A$2.9 billion offer Monday for Insignia Financial.  Hedge funds are loading up on positions that profit from a weaker Australian dollar as the threat of US tariffs and the impact of a sluggish Chinese economy bludgeon the currency.

What happened overnight

US stocks fell and Treasury yields rose after a gauge of service-sector activity climbed more than expected. Bond traders ceased fully pricing in a US Federal Reserve rate cut before July after the data. Asian equity futures are mixed, while oil and gold gained. Donald Trump threatened Denmark with high tariffs in his push to bring Greenland under US control, in a wide-ranging press conference in which he also refused to rule out military action over the Arctic island territory or the Panama Canal. He also spoke of using "economic force" to compel Canada to become the 51st state. Mark Carney said he's considering entering the race to replace Justin Trudeau. Carney, who is chair of Bloomberg Inc., and Chrystia Freeland lead a list of contenders. Chinese-state sponsored hackers stole military data from the Philippine president's office as part of an espionage campaign that mostly took place from early 2023 to June last year, people familiar said. JPMorgan Chase & Co. is preparing to tell all its employees to return to the office five days a week, ending a hybrid-work option for thousands of staff and returning to the attendance policy that was in place before the pandemic.

What to watch

• Australia's November inflation report at 11:30 a.m. in Sydney

One more thing...

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