Good morning and welcome back, it’s Ainsley here with all the news you need to start your working week.

Today’s must-reads:
• China’s live-fire naval drills
• Chalmers to press US for tariff exemption
• PM eyes A$8.5 billion boost to Medicare

What's happening now

China rejected any suggestion from Australia that it failed to be transparent in conducting live-fire naval drills on Friday and Saturday in international waters in the Tasman Sea. Chinese Ministry of Defense spokesman Wu Qian said the Australian side was “completely inconsistent with the facts,” according to a statement on Sunday. He added that Australia had “deliberately hyped it up.”

Treasurer Jim Chalmers is traveling to Washington DC as Australia presses its case to be excluded from tariffs. “Trade and tariffs will be part of the conversation, but not the whole conversation,” Chalmers said on the ABC’s Insiders program. He plans to meet with US Treasury Secretary Scott Bessent.

Anthony Albanese said that if re-elected his government would invest A$8.5 billion in Australia’s universal health care system. The funds would expand access to free consultations with general practitioners and increase training programs for doctors and nursing scholarships. 

BHP, the world’s biggest mining company, is in the process of turning itself into a copper miner from an iron ore one, writes David Fickling for Bloomberg Opinion. It plans to dedicate roughly half of its capex to copper, pushing iron ore below a quarter of the total. The problem is the dearth of good deposits to spend all that money on. 

New Zealand retirement village owner Ryman Healthcare is raising NZ$1 billion at a deep discount to strengthen its balance sheet in the latest step to revive business performance.

What happened overnight

Germany’s conservative opposition leader Friedrich Merz won Sunday’s federal election, comfortably finishing ahead of the far-right AfD party and Chancellor Olaf Scholz’s Social Democrats. The vote holds particular weight as Europe’s biggest economy contends with stagnating growth, Russia’s war in Ukraine and US President Donald Trump threatening a global trade war.

The animal spirits that sent the US stock market flying over the past two years are going global. After soaring more than 50% combined in 2023 and 2024, the S&P 500 Index has largely flatlined since Trump’s inauguration. The hot trade is now moving overseas, with investors piling into European and Asian stocks.

Ukraine’s President Volodymyr Zelenskiy said he would be ready to step down if it were to guarantee peace to his war-torn country. Speaking in a news conference in Kyiv on Sunday, Zelenskiy said he would happily trade his presidency for Ukraine’s NATO membership if such an offer was made. 

The US Department of Defense told its employees to pause responding to emails asking them about their accomplishments last week, as part of a directive by Elon Musk to make the federal workforce more efficient. The Trump administration sent the emails to more than 2 million federal workers, with a deadline by Monday, warning that failure to respond would be taken as a resignation.

What to watch

• Earnings include APA Group, Abacus Group, Adairs, Ampol

One more thing...

Pope Francis remained in critical condition for a second day even though he didn’t experience further respiratory crises, the Vatican said. The 88-year-old pontiff is still receiving high-flow oxygen to help with his breathing and some blood tests show an initial, mild, renal failure, which is currently under control.

Pope Francis has been fighting a weeklong battle with pneumonia. Photographer: Filippo Monteforte/Getty Images