Greg Gibbs, Analyst at Amplifying Global FX Capital Pty Ltd, suggests that the RBA is unlikely to comment on domestic politics, but the change to a new PM, ditching of the National Energy Guarantee (NEG) policy, and weaker polls for the ruling Liberal-National Coalition may dampen business confidence and investment in the lead up to the next election that is coming into view.
Key Quotes
“It is likely to be held before 18 May 2019, when a half Senat election must be held by.”
“Political risk is also a factor abroad. It is apparent in several emerging market economies, contributing to upheaval in the last month. It is elevated in the UK as the Brexit timetable heats up, it is a factor Italian budget decisions slated for October, and it is rising in the US as the mid-term elections approach in November, and president Trump faces legal pressure and talk of impeachment. For instance, Trump is more likely to play hardball on Trade in the lead-up to the US Congress elections.”
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