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Tomorrow, Australians are heading to the polls for the federal elections. The elections will determine their legislature and new Prime Minister.
Elections usually generate some market volatility as investors digest the change in government, and what it means for the future prospects of the economy.
The latest polling shows that the current Prime Minister Scott Morrison’s Liberal/National Coalition is just a percentage point behind opposition leader Bill Shorten’s Labor. This is well within the margin of error.
Anything could happen! And that uncertainty isn’t something that the markets like. In fact, one could argue that not wanting to affect change in the middle of an electoral period was one of the reasons for the RBA’s hold.
Should Scott Morrison prevail, it would be a continuation of the status quo. And the market would likely positively interpret this.
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