Australia's double-dissolution election outcome hard to predict

Australians go to the polls Saturday to elect a new government while the final outcome is hard to predict. This is Australia’s double dissolution “early” general election and all seats of both houses of Parliament are up for re-election. Voting is compulsory in Australia.

Prime Minister Malcolm Turnbull’s conservatives are pitted against a resurgent center-left Labor opposition. There is an unusual degree of divergence in the economic policies of the two main parties, the Liberal-National Party Coalition (L/NP) and the Australian Labour Party (ALP).

A new poll showed Mr. Turnbull’s center-right coalition had pulled ahead following the shock outcome in another close contest: the UK’s Brexit referendum. People perceive conservatives better economic managers in uncertain times.

“We expect a narrow victory for the incumbent coalition government under PM Malcolm Turnbull in the House of Representatives (lower house). In contrast, we see a continued mash of minor parties preventing a outright majority in the Senate (upper house), the latter the closest we expect to a “protest vote” being lodged by the public," notes Research Team at TDS.

Credit Agricole, in a note to clients, writes that this Australia’s federal election on July 2 is set to be more interesting for financial markets than those in the recent past. Adding that a victory by the incumbent L/NP in both the House of Representatives and Senate would, we believe, would be a boost for the AUD.