The Australian election, held on Saturday, has still not been called, it is too close.
Here are the facts:
- To form a majority government a party needs to win 76 seats
- Each of the major parties has won 67 seats so far
- 5 seats have been won by minor parties or independents so far
- 11 seats remain in doubt
- Around 80% of the vote has been counted
Here is what is likely:
- While the result is too close to call it does appear likely that the current ruling coalition (Liberal) will win the majority of the 11 seats still in doubt (probably 8 of the 11) - they need to win at least 9 of the 11 to form a majority government, but if its less than 9 then they would typically get the first crack at forming a minority government
- It does not appear likely that the current opposition party (Labor) can win majority government
Here is some speculation:
- So, the most likely outcome at this stage appears to be the Liberals form the government in combination with minor parties/independents
- Get this ... there will be no further counting on Sunday or Monday (welcome to Australia)
For the AUD - this is an added uncertainty.
- In the bigger picture it makes difficult fiscal decisions more difficult. You can expect increased talk of the threat to Australia's AAA rating. I doubt a cut is imminent, but expect those who have been expecting for one for, well, years now, to be vocal.
- Offshore developments will still be of major importance - Brexit developments, the Chinese economy and Federal Reserve developments amongst them.
- The AUD finished last week very strongly indeed, there may be a dip on Monday but I expect we will see buyers not taking too long to come back in (but watch the news and developments domestically and offshore).