Australian companies have been in the spotlight over the past year for corporate scandals ranging from breaching anti-money laundering laws to sexual harassment. Still, thanks to the quality of environmental, social and governance-related disclosures, analysts rate the nation highly among its Asia-Pacific peers in a year when the style of investing is becoming more popular. Australian pension funds, the world's fourth-largest pool of retirement savings, are using their influence to prompt changes in corporate behavior. And the country's unique two-strikes rule — which triggers a vote to change a company's board if shareholders vote against the firm's remuneration report twice in a row — is being used as a "lightning rod for broader governance concerns," Glover said.
The U.S. said it found "conclusive evidence" that a Chinese company used forced labor to make extracts of the sweetener stevia, with American ports now directed to seize any shipments. Inner Mongolia Hengzheng Group Baoanzhao Agriculture, Industry and Trade Co. used convict, forced or indentured labor to make products that are being — or are likely to be —imported to the U.S., Customs and Border Protection said in a statement. The move is the latest in a string where the U.S. is raising pressure on China over some companies' alleged ill-treatment of some workers. China's Foreign Ministry has denied the allegations.
What We've Been Reading
This is what's caught our eye over the past 24 hours:
And finally, here's what Tracy's interested in today
What happens to the U.S. Treasury market after the November elections? Would a bigger deficit under a Democratic win automatically translate into higher yields as the Treasury funds more stimulus with additional sales of U.S. debt? There's a powerful reason that might not happen. In an upcoming episode of the Odd Lots podcast, JPMorgan's Josh Younger argues that in emphasizing its support for "critical market functioning," the Federal Reserve has effectively placed a backstop on yields even in a scenario where the deficit booms.
He argues there's a potential mismatch between the private market's capacity for intermediating the Treasuries market and the vast (and growing) size of the market itself. Big dealer-banks who support the market by buying U.S. debt or providing repo financing have limited balance sheet to do so. Meanwhile the stock of outstanding U.S. debt is getting bigger, setting the stage for a market seizure. The suggestion is that this mismatch could give rise to fiscal dominance, or the need for the Fed to create a backstop to maintain the smooth functioning of the market. In other words, a bigger U.S. deficit accompanied by more Treasury issuance could actually force yields lower by introducing a new policy consideration for the Fed.
You can follow Tracy Alloway on Twitter at @tracyalloway.
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