Markets Overview
- ASX SPI 200 futures down 0.2% to 7,225.00
- Dow Average up 1.0% to 33,093.34
- Aussie up 0.4% to 0.6540 per US$
- U.S. 10-year yield little changed at 3.7983%
- Australia 3-year bond yield fell 0.8 bps to 3.44%
- Australia 10-year bond yield fell 3 bps to 3.70%
- Gold spot down 0.2% to $1,943.17
- Brent futures up 0.2% to $77.07/bbl
Economic Events
- 11:30: (AU) April Private Sector Houses MoM, prior -2.8%
- 11:30: (AU) April Building Approvals MoM, est. 2.0%, prior -0.1%
American equity futures posted modest gains amid cautious optimism the US will avert a catastrophic default after the weekend’s tentative debt-ceiling deal. European stocks wavered in muted holiday-affected trading.
Contracts on the S&P 500 and Nasdaq 100 were up about 0.3% each, with cash markets closed for Memorial Day. The dollar, which has benefited from angst around the statutory borrowing limit, held Friday’s decline while Treasury futures linked to the 10- to 30-year part of the US government bond market rallied on light volume.
Other News
PwC Australia is putting nine senior partners on leave and appointing independent directors to its board as the embattled firm seeks to claw back confidence in the wake of a tax scandal.
The company will ringfence business conducted with Australia’s government to minimize conflicts of interest and boost governance, according to a statement Monday. The chairs of its governance board and its designated risk committee also stepped down from their respective roles.
“We are announcing these actions today, despite the fact that our investigation continues, because we recognize that our stakeholders want more transparency in order to restore confidence in our firm,” said Kristin Stubbins, acting chief executive of PwC Australia.
PwC has been under fire following revelations that one of its former tax chiefs obtained secret information during his time working as an adviser to the government, and then leaked it to his colleagues who used it to shop tax-planning advice to global customers.
“We recognize that enhanced governance, structures and controls are necessary and the decision to ringfence our Federal government business is a critical next step,” Stubbins said.
Earlier this month, Ziggy Switkowski, a former telecommunications executive, was appointed to lead an independent review into the firm’s governance and culture. Stubbins said the full report and its recommendations will be published when the review concludes in September.
PwC didn’t name the partners being put on leave. Former PwC Australia Chief Executive Officer Tom Seymour and two other executives stepped down earlier this year after emails dating from 2014 to 2017 were made public following demands from parliament, albeit with names redacted. The nation’s police force last week opened an investigation into the matter.
Australian Prime Minister Anthony Albanese was asked on Monday whether the names of all PwC partners who had access to confidential tax information should be publicly released.
“All of this should become public at the appropriate time. Of course, there are investigations under way and I don’t want to say anything to interfere with those processes,” Albanese said on 2SM radio Monday. “But quite clearly what went on there is completely unacceptable.”
Parliamentary scrutiny is expected to intensify again from Tuesday with Australian Tax Office officials and representatives from the agency regulating the taxation sector likely to field questions during hearings on the issue.
Stubbins, in a separate letter Monday, apologized on behalf of her firm for sharing confidential government tax policy information and for “betraying the trust placed in us.”
“Let me close by again apologizing for our breach of trust,” she said. “I have worked at PwC for my whole career, and this has been personally and professionally devastating for me and my colleagues at PwC.”
(Bloomberg)
