1. Will Albo’s China mate help local industries?

The positive meeting between PM Albanese and Xi Jinping is seen as a thawing of a frosty relationship and industries affected by Chinese trade bans are hopeful that, over time, normalisation of relations will help their bottom lines. As the AFR reminds us: “China started slapping punitive tariffs and de facto bans on what was previously $20 billion of exports in 2020, following the Morrison government’s call for an international inquiry into the origins of the coronavirus pandemic. Coal, barley, wine, lobsters, beef, timber and cotton were among the sectors that bore the brunt, although the biggest export, iron ore, was left untouched because of China’s dependency on Australian supplies of the commodity.”

2. Russian bombs stray into Poland

Russian bombs hit at least two Poles and this could be a problem for NATO, as Poland is a member. Our stock market was going to open flat but after the report of missiles meant for Ukraine targets went off course, share prices did dip on geopolitical concerns. That said, Wall Street eventually digested the news, and with two hours to go, the S&P 500 was up close to 1% and the Nasdaq was 1.6% higher.

3. Stocks up on more good inflation news

While the Russian missile mistake wasn’t ignored by markets, it was offset by another good US inflation number, which should help build the case for the Fed easing up on big interest rate rises. The Fed watches an inflation indicator called the PPI (the producer price index) and this came in at a lower-than-expected 0.2%. “The PPI read certainly adds more fuel to the fire for those who feel we may finally be on a downward inflation trend,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley’s Global Investment Office. “The market embraced last week’s consumer downtick and today’s initial reaction seems to be more of the same.” (CNBC)

4. Well, der, Doc!

I generally cut Dr Phil Lowe some slack because being the RBA boss is a tough job anytime, but during a pandemic with lockdowns, that was a huge challenge. But his ‘rates will stay low until 2024’ call was silly. I could argue telling us that in early 2020 when we feared a Great Depression could’ve been defensible, but sticking with it as the economy rebounded and people were borrowing was plain wrong. And the SMH’s Shane Wright says even the RBA agrees it was wrong.“The Reserve Bank has conceded it was wrong to say interest rates could stay at record lows until 2024 but reserved the right to again make a long-term prediction on the direction of monetary policy if the nation’s economic circumstances demand it,” he wrote.

5. Small business cash crisis

The Australian reports that “small businesses are bearing the brunt of the economic downturn, with surging interest rates and runaway inflation creating a squeeze on cashflow and pushing payment defaults to a two-year high.

That’s the take from CreditorWatch’s latest business risk index. “Payment defaults have increased at an average rate of 20 per cent per month over the past year, according to CreditorWatch, with late payments to small businesses three times higher than the big end of town,” Giuseppe Tauriello writes today.