AUSTRALIA: Minority Government Distinct Possibility As Focus On Certain Seats

Apr-23 02:20

Australia holds its federal election on May 3 and as the date approaches the incumbent Labor Party (ALP) has increased its share of both the primary and 2-party preferred vote across opinion polls. If the actual result comes in close to the surveys, which are currently around the 2022 outcome, then Labor could hold its small majority in the House of Representatives but trends are unlikely to be uniform across seats and the risk of a minority government remains high.

Australia average of opinion polls - 2-party preferred %

Source: MNI - Market News/Wikipedia

  • The ALP had been behind the opposition LNP in the important 2-party preferred measure (Australia has a preferential voting system) from September last year but turned that around once the election campaign officially began.
  • Polls in April are showing that the ALP could achieve a primary vote of around its May 2022 33% result with a 2-party preferred possibly around 2022’s 52.1%. It is difficult to ascertain if that will allow it to keep its 2 seat majority of 77 as outcomes in individual seats will be particularly important given the high number of incumbent and candidate independents as well as local issues.
  • The average of recent surveys is showing that in terms of percentages the 2025 election could be very similar to 2022 with the average of the last 3 polls (Freshwater, Newspoll, Roy Morgan) showing the centre-left ALP with 34% (+1pp), centre-right LNP 36% (unchanged), Greens (+1pp), independents 13% (+3pp) and right-wing One Nation 7% (+2pp). The 2-party preferred is in line with 2022 at 52:48 to the ALP.
  • The most recent Freshwater poll taken over April 14-16 showed a seat projection of ALP 68 (-9), LNP 69 (+16), Greens 1 (-3) and other 12 (-3), which is signalling a minority government but unclear of which persuasion. This poll reinforces the importance of the outcomes in individual seats. 

Australia average of opinion polls - primary vote %

Source: MNI - Market News/Wikipedia

Historical bullets

JGBS: Cash Bonds Slightly Cheaper, BoJ Ueda & Uchida In Parliament

Mar-24 02:01

At the Tokyo lunch break, JGB futures are slightly weaker, -9 compared to the settlement levels.

  • BoJ’s Uchida is in Parliament, with Governor Ueda scheduled to appear soon. Uchida has delivered the now familiar line that the BoJ is set to raise rates further if the economic outlook is released.  
  • Jibun Bank Flash PMIs for March have printed: Mfg 48.3 vs 49 in Feb, Services 49.5 from 53.7 in Feb and Composite 48.5 from 52 in Feb.
  • Cash US tsys are 2-3bps cheaper across benchmarks in today's Asia-Pac session after Friday's uneventful end to the trading week.
  • Cash JGBs are flat to 1.5bps cheaper across benchmarks. The benchmark 10-year yield is 1.1bps higher at 1.536% versus the cycle high of 1.58%.
  • Swap rates are 1-2bps higher, with swap spreads mostly wider.

CHINA PRESS: China To Make Consumption Main Growth Driver

Mar-24 01:47

China views expanding domestic demand as a long-term strategy and will make consumption the main driving force of economic growth, said Han Wenxiu, deputy director at the Central Financial and Economic Affairs Commission. China’s proportion of consumption in the national economy was about 20 percentage points lower than developed countries, Han noted. (Source: China Securities Journal)

CHINA PRESS: Personal Consumer Loans Limit Raised

Mar-24 01:47

Commercial banks can temporarily increase personal consumer loans to CNY500,000 from CNY300,000 and raise personal internet consumer lending to CNY300,000 yuan from CNY200,000, according to an announcement from the National Financial Supervisory and Administration Bureau. Dong Ximiao, chief researcher at Zhaolian Financial, said the credit limit increase will help leverage the role of consumer finance in satisfying large-scale consumption needs and expanding domestic demand.