
Australia air force pilots also heard Chinese navy live-fire warning on radio
AVALON, Australia, March 25 (Reuters) - The Royal Australian Air Force (RAAF), monitoring a Chinese navy warship as it circumnavigated Australia last month, heard it warn it would use live fire in its exercises on a civilian radio broadcast, defence pilots said on Tuesday.
A People's Liberation Army Navy frigate conducted the unprecedented live-fire exercise in the Tasman Sea between Australia and New Zealand in February, causing 49 commercial flights to be rerouted.
China has said it gave adequate warning about the drill under international law, but Australian and New Zealand authorities said it fell short of best practice for notifications.
Commercial airlines first heard about the live-fire drill when a Virgin Australia pilot picked up a Chinese navy broadcast on the 121.5 MHz emergency radio channel.
Ahead of a national election due by May, opposition Liberal Party leader Peter Dutton criticised the Labor government for "a situation where our national maritime surveillance was outsourced to a Virgin airline pilot".
At the Australian International Airshow in Avalon on Tuesday, RAAF maritime surveillance pilots said Australia's P-8A Poseidon were flying "high duration, high frequency sorties" and monitoring the Chinese navy warship's transmissions on UHF and VHF at the time, in details that had not previously been made public.
"The transmissions that came through are just standard warnings of their positions as well as their intent of live-fire exercises," said P-8A Poseidon flying officer Patrick Makeham.
He described this as "similar to saying that we will be conducting live firing exercise in those areas".
Air Commodore Gus Porter, director-general of RAAF air combat capability, said the P-8A aircraft were used for anti-submarine warfare and to deter aggression.
"You don't need to be on top of a task group 24 hours a day to be tracking exactly what they are doing," he added.
The RAAF P-8A aircraft conduct routine surveillance patrols in international waters in the South China Sea, which China has criticised.
Australia last month complained to China over what it was "unsafe and unprofessional" actions by a Chinese fighter jet releasing flares within 30 metres (100 feet) of an Australian P-8A aircraft.
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Reuters
14 minutes ago
- Reuters
Morning Bid: Trump-Musk bust-up smolders
LONDON, June 5 (Reuters) - What matters in U.S. and global markets today Donald Trump's hotly anticipated meetings with the leaders of the world's two other biggest economies ended up being sideshows compared to his online bust-up with billionaire backer Elon Musk. It's Friday, so today I'll provide a quick overview of what's happening in global markets and then offer you some weekend reading suggestions away from the headlines. Today's Market Minute * White House aides scheduled a call between Donald Trump and Elon Musk for Friday, Politico reported, after a huge public spat that saw threats fly over government contracts and ended with the world's richest man suggesting the U.S. president should be impeached. * U.S. President Donald Trump and Chinese leader Xi Jinping confronted weeks of brewing trade tensions and a battle over critical minerals in a rare leader-to-leader call on Thursday that left key issues to further talks. * China has signalled for more than 15 years that it was looking to weaponise areas of the global supply chain, a strategy modelled on longstanding American export controls Beijing views as aimed at stalling its rise. The scramble in recent weeks to secure export licences for rare earths shows China has devised a better, more precisely targeted weapon for the trade war. * By any measure, the recent resilience of U.S. stocks is remarkable, with Wall Street powering through numerous headwinds to erase all its tariff-fueled losses and move into positive territory for the year. Reuters columnist Jamie McGeever explains why the rally may still have some juice left in it. * There are some tentative early signs that weak thermal coal prices are starting to boost import demand among Asia's heavyweight buyers China and India. Read Reuters Columnist Clyde Russell to find out more. Trump-Musk bust-up smolders For markets trying to navigate everything from creeping signs of labor market weakness to the latest European Central Bank easing, the spat between the U.S. president and the world's richest man proved more than a distraction. It remains to be seen if it overshadows the May payrolls report later on Friday. The extraordinary sparring match drew in other major political and business figures and included potentially seismic accusations and threats. In turn, the share price of Musk's Tesla .TSLA plummeted almost 20% at one point, dragging Wall Street stock indexes and crypto tokens deep into the red. The public feud appeared to cool off somewhat overnight and allowed stock futures to regain some lost ground. But the fact that the spat overshadowed the other major events of the day was another marker of this administration's unpredictability. The substance of the row was over Trump's "one big beautiful" fiscal bill that Musk thinks is a "disgusting abomination" due to the amount of spending. The bill, which has yet to be passed by the Senate, is expected to add $2.4 trillion to the U.S. debt over the next decade, based on CBO estimates. The vast bulk of this will likely be incurred over the next four years. In the background, the call between Trump and China's President Xi Jinping delivered no breakthroughs in the trade row apart from warmer words and an agreement to resume talks. The Oval Office meeting with Germany's Chancellor Friedrich Merz was relatively positive about trade and diplomatic issues. Earlier in the day, the ECB cut rates again as expected and suggested that there may be a pause at its next meeting and that it could be near the end of its easing cycle now that 'real' inflation-adjusted rates are back near zero. The euro hit a six-week high on Thursday regardless, although it gave back those daily gains today. Rising weekly U.S. jobless claims, meantime, cast a shadow over today's release of the May employment report. Consensus forecasts are for a slowdown in payroll growth to 130,000. Treasury yields , which ebbed and flowed all day on the conflicting signals from the trade meetings and stock gyrations, are back hovering at the week's lows ahead of the jobs report. Even though Federal Reserve officials continue to signal caution about the uncertain outlook ahead, markets are now priced for a resumption of Fed cuts by September. Into the already confusing mix, the Treasury released its annual report on potential currency manipulation overseas, adding Switzerland and Ireland to its watchlist, which already includes China, Japan, Germany, South Korea, Taiwan, Singapore and Vietnam. The list likely carries more heft than usual amid multiple tense trade negotiations. Markets assume the U.S. may pressure other countries to let their currencies appreciate versus the dollar as part of deals to avert severe tariffs being re-imposed next month. The Swiss National Bank responded on Friday by saying it would intervene in currency markets where necessary to keep inflation on track. Intervention to cap a super-strong franc has been a critical monetary tool used over the past decade and may need to be tapped again now that Swiss inflation has returned negative just as the SNB's key interest rate is set to return to zero in June. Elsewhere, China's yuan slipped against the dollar while falling to a near two-year low versus its major trading partners on Friday as the Trump-Xi call fell short of many expectations. Stock markets overseas were mixed on Friday as Wall Street remained on edge and the U.S. jobs report loomed. In the euro zone, first-quarter GDP was revised higher to show twice the growth originally estimated: 0.6% quarter-on-quarter, leading to an annual rate of 1.5%. India's central bank cut key rates by a larger-than-expected 50 basis points to 5.5%, its steepest cut in five years. It also slashed its cash reserve ratio - funds that banks are required to hold - by 100 bps to 3% in a surprise move aimed at boosting lending and speeding up policy transmission. In single stocks, Tesla shares recovered around 5% in Frankfurt on Friday, having closed down 14% in New York yesterday amid the Trump-Musk spat. It lost about $150 billion in market value yesterday, which caused the erstwhile member of the 'Magnificent Seven' megacaps to drop to ninth in the list of most-valuable firms behind Broadcom and Berkshire Hathaway. Broadcom's shares (AVGO.O), opens new tab, however, fell 4% in extended trading overnight as its forecast-beating earnings seemed to underwhelm the Street. In Bank of America's weekly tally of fund flows, U.S. stocks saw outflows of $7.5 billion, the third week of exits, while European shares saw inflows of $2.6 billion, the eighth week of inflows. 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Reuters Francois Murphy and John Irish report on key blind spots that include not knowing how many centrifuges Iran possesses or where the machines and their parts are produced and stored. * OCEAN ECONOMY: Trade in the global 'ocean economy', opens new tab hit as much as $2.2 trillion in 2023, about 7% of total world trade, but this trade is increasingly threatened by climate change and environmental problems, the United Nations trade and development arm UNCTAD showed in a report this week. The ocean economy grew faster than the world economy at large in the five years to 2020 and an estimated 100 million jobs depend on it. * 'TRUMP DOCTRINE': The emerging foreign policy under President Donald Trump resembles a 'look the other way' doctrine, opens new tab or a 'none of our business' doctrine, argues former George W. Bush State Department official Richard Haass on Project Syndicate. "The U.S. sought to change the world, annoying some and inspiring others. Those days are gone, in some ways for better, but mostly for worse. The US has changed. It is coming to resemble many of the countries and governments it once criticized." * MAGNETIC FEW: A small team in China's Ministry of Commerce decides the fate of the global auto industry, one rare earth magnet export permit at a time. China holds a near-monopoly on rare earth magnets, a key component in electric vehicle motors, and it added them to an export control list in April as part of its trade war with the United States. Reuters' Laurie Chen and Lewis Jackson show how it falls to the Bureau of Industrial Security and Import and Export Control, part of China's Ministry of Commerce, to review export permits for the rare earth magnets, vital for car motors, wind turbines and even U.S. F-35 fighter jets. * FINANCE AND AI: Artificial intelligence advances in the financial sector, opens new tab offer enhanced data analysis, risk management and capital allocation, but there are problems too, according to a paper on CEPR's VoxEU website. As AI systems become more widespread, they introduce challenges for regulators tasked with balancing the benefits of innovation with the need for financial stability, market integrity, consumer protection and fair competition. * DRONE ATTACK: Ukraine's 'Operation Spider's Web', opens new tab last weekend used smuggled drones to attack bomber aircraft deep inside Russia, and the 'remarkable event' could affect the future of conflict, argues Council on Foreign Relations fellow Michael Horowitz. The attack "clearly shows that even targets deep in a country's territory could now be at risk". * IMF EUROPE: The case for closer European economic integration, opens new tab has become more compelling as external challenges multiply, according to Alfred Kammer, director of the International Monetary Fund's European Department. Stressing the need for the completion of the single market, Kammer said capital markets integration has been too slow and that cross-border flows have been frustrated by persistent fragmentation. "If history is a guide, Europe can turn adversity to advantage." * ALPINE TRUSTS: Liechtenstein is examining tightening control of scores of Russian-linked trusts abandoned by their managers under pressure from Washington. Reuters' John O'Donnell and Oliver Hirt cite sources in reporting that the country, one of the world's smallest and richest, is home to thousands of low-tax trusts, hundreds with links to Russians. Chart of the day Supply chain stress ticked up in May, data from the Federal Reserve Bank of New York said on Thursday. The bank noted that its Global Supply Chain Pressure Index for May rose to 0.19 from -0.28 in April, only the second time it stood in positive territory this year and the highest reading since the 0.20 seen in August of last year. Although the index remains subdued compared to the post-pandemic surge, growing concerns about the impact of the tariff war - particularly the impact of China's restrictions on rare earth and minerals exports on the global auto industry - will ensure policymakers keep a close eye on these pressures for any signs of re-emerging inflation. Today's events to watch * U.S. May employment report (8:30 AM EDT), April consumer credit (3:00 PM EDT); Canada May employment report (8:30 AM EDT) Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.


Reuters
29 minutes ago
- Reuters
Russia says its strike against Kyiv and other centres was a response to Ukrainian 'terrorist acts'
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Reuters
32 minutes ago
- Reuters
EU open to lowering tariffs on US fertilisers in trade talks
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