1. Now it’s Borxit. Brexit campaign leader and former London mayor Boris Johnson has dropped out of the race to replace British PM David Cameron overnight after suddenly losing the support of Tory heavyweight Michael Gove. In a touch of schadenfreude for “stay” fans, the justice secretary announced he’s making a tilt for the top job instead, having previously ruled it out. The short version is Gove didn’t think Boris was up for the job, and he’s now a front—runner alongside home secretary Theresa May. Here’s who’s in the race.
Meanwhile, George Soros offered his two euros worth on Brexit, telling the European Parliament it “aggravated two looming dangers” and “unleashed a crisis in the financial markets, comparable in severity only to 2007/8”.
“This has been unfolding in slow motion, but Brexit will accelerate it. It is likely to reinforce the deflationary trends that were already prevalent,” he said, pushing for more expansive fiscal stimulus over “the orthodoxy of German policymakers” wanting austerity, adding “the refugee crisis poses an existential threat to Europe”.
2. To the markets, global stocks had a good night thanks to promises of more QE on both sides of the Atlantic. Bank of England governor Mark Carney went Big Bash League on the sterling last night, sending it over the boundary after saying “In my view, and I am not prejudging the views of the other independent MPC members, the economic outlook has deteriorated and some monetary policy easing will likely be required over the summer”. The FTSE was up 2.3%, the Dow and S&P were up 1.3% each. But Crude got thumped in one 30-minute period and is down around 3% in WTI terms. Gold is hanging tough at $1320, copper is strong at $2.19 and the Aussie dollar is back up at 0.7440/50, while the global bond market rally continues with UK 10’s now at 0.87%. And as David Scutt says, strap in and hang on, another wild session for the dollar is coming up.
3. The RBA will be a reluctant cutter as a result, Greg McKenna reckons. They meet next Tuesday, and here’s what our markets & economics correspondent is thinking.
Take it away Macca:
But, if the RBA is anything it is not stupid. So here’s the question I’m asking myself. If growth is relatively healthy, if the dollar is no longer helping, but not hurting the economy, if the negative behavioural impacts of super low rates are counter productive, and if there is nothing the RBA can do about falling inflation anyway, isn’t the best course of action to leave rates where they are?
I know this might be a radical idea and completely non-consensus but RBA governor Stevens was one of the first to cry foul on the ability of monetary policy to solve all the economic ills that ail an economy. It’s what Mark Carney said last night. So why would the RBA travel the path other central banks have proven doesn’t work. There’s nothing to suggest Australia is special and the outcome will be different. So why not leave rates where they are?
4. It wasn’t meant to be like this. It looks like everyone who said they’d vote for the Liberals if only Malcolm was in charge weren’t telling the truth. 24 hours before Australia heads to the ballot box, the Fairfax/Ipsos poll is dead even, with Labor down 1%, the Coalition up 1% to put them at 50/50. The story was supposed more like Caesar marching into Rome when Turnbull took over from Abbott, instead it looks more like Gillard post—Rudd in 2010 and Shorten, expected to be dead man walking just nine months ago, is a contender.
But after the eight week campaign, everyone’s exhausted with even Leigh Sales resorting to three word slogans: “wrap it up” she told Shorten during an interview on 7.30 last night as he attempted to bring up Medicare’s sale one more time. Meanwhile, foreign minister Julie Bishop won’t be an ambassador for safe driving any time soon after being photographer on her phone behind the wheel (sad emoji, naughty emoji, thumbs down).
Log on on Saturday night for Business Insider’s live coverage Saturday night as the result unfolds. We’ll also be wrapping things up on Sunday. And don’t forget to let us know who has the best sausage sizzle at your polling booth.
5. What sort of Australia will Bill or Mal inherit on Sunday? Michael McCarthy, chief markets strategist at CMC Markets sat down with Paul Colgan and David Scutt for the weekly Devils and Details podcast. They covered the current state of the economy, and a bunch of election issues, from populism to the economic impact of election promises and policy power and the risks of paralysis. Grab it on iTunes, or listen in below.
6. The things that unite us. IBM’s supercomputer Watson looked at the Australian election campaign and reckons Malcolm Turnbull’s Twitter followers are feeling better about things than Bill Shorten’s. Watson analysed language to break down sentiment among Twitter users and Shorten’s followers are a bit more neurotic than Turnbull’s, who rate higher on agreeableness, openness and conscientiousness. So happiness will always be higher under a Coalition government.
7. Now Google wants your babies. Not content with your browsing habits, Nest, a division under Google’s parent company Alphabet, wants to take smart technology into the bedrooms of children. The tech behemoth scored a patent this week for a smart crib embedded with sensors that can monitor a baby’s movements and keep tabs on the environmental factors to make sure the baby is safe. The robot parent has the potential to respond to issues such as crying by activating an entertainment device to display LED cartoon animals on the ceiling to calm the baby down. Or, it could play calming music through an integrated speaker.
8. We need to talk about Rio. When Brazilian cops are standing at the airport with a sign saying “Welcome to hell”, and warning visitors they won’t be safe, it’s starting to look like Adam Scott and all the highly paid professional sportspeople who’ve said nope to the Olympics have a pretty good point.
— Martin Hodgson (@MartinxHodgson) June 28, 2016
Yes, there are always will-they-be-ready-in-time stories before every Games, but protests put on by police and other civic workers, Zika fears, and body parts washing up on Copacabana Beach, where the beach volleyball events will be held, and the city’s mayor wondering where the nearly $1 billion he was promised is, things don’t bode well.
9. Owners look like their dogs, and now it turns out couples end up looking like each other too. Wharton professor Jonah Berger explains how couples tend to marry those “that look at least a little like them” in his new book, “Invisible Influence: The Hidden Forces That Shape Behaviour”. As couples spend more time with each other, they begin to look more alike and subconsciously mimic each other’s facial expressions to express their feelings and emotions. Berger noted that couples who begin to look more and more like each other over time reported higher satisfaction in their marriages, but we’d advise against going home to your spouse tonight and say “why can’t you be more like me?!”
10. A whole lot of CEOs slept rough on a cold winter’s night last week to raise money for St Vincents to help the homeless. Among them was Allure Media’s Jason Scott who’s given this sobering account of the issue of homelessness and the experience of spending the night outdoors in a cardboard box. It’s a reminder of how lucky we are and our obligation to do more for those who aren’t.
See you Monday, when we welcome our new overlords. Have a great weekend.
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