April 24, 2025 • 17 mins
As voters start heading to the polls in the Australian election, the market turbulence from Donald Trump’s trade war continues to drown out much of the leaders’ campaigns - even as some policies could impact investments across a range of asset classes.
This week on the podcast, host Chris Bourke asks cross-asset reporter Richard Henderson: what should investors be watching out for in the days running up to the May 3 vote - and beyond?
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Episode Transcript
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Speaker 1 (00:01):
Well, it's can be pretty tired.
Speaker 2 (00:05):
But you can't really judt the polling though, because you know,
there's been elections where the polls are being completely wrong.
When Scott Morrison won, when John Howard won, the polls
never indicated that they would win, you know, So it's
it's anyone's race.
Speaker 3 (00:19):
I think as early voters start heading to the polls,
the election outcome is looking as unpredictable as the current
state of financial markets. In the days and weeks after
next Saturday's result, will the investment backdrop become any clearer
for Australia. Hello, I'm Chris Burk and welcome to the
Bloomberg Australia Podcast. The election is just days away, but
(00:43):
one thing continues to weigh on australians minds more than
anything else. You guessed at Donald Trump. The US president's
erratic tariff drama has drowned out much of the debate
and instead made Australians more anxious as turbulent stock markets
shake up their super fan balances. But let's not forget
there are some policy changes being proposed by both Prime
(01:04):
Minister Anthony and Albanezi and Coalition leader Peter Dutton, and
some of those policies could potentially impact stocks, the Aussie dollar,
and investments. You may not have even thought about to
discuss all this. I'm pleased to welcome back Bloomberg's Melbourne
based cross asset reporter Richard Henderson.
Speaker 1 (01:22):
Hello, rich Have you cast your vote yet? Not yet? No,
I'm going to wait for the big day.
Speaker 3 (01:28):
Well, I guess you haven't had a lot of time
to get in the early voting with all those daily
markets swings and roundabouts keeping you very busy right now.
Speaker 4 (01:37):
Exactly, can barely barely step away from from the seminal.
Speaker 3 (01:40):
Can you, first of all just give us an overview
of what stock markets are looking like right now and
what the biggest drivers are of that are.
Speaker 4 (01:50):
Well, we're still caught in this huge volatile moment and
the Australian election is happening really at this momentous time
for globalizer for capitalism around the world. You know, Donald
Trump's tariff a gender threatens to rewire a global trade
and that has a huge impact for many countries around
(02:11):
the world, including Australia. China, Australia's largest trading partner, is
one of the biggest concerns. We still don't have a
deal between China and the United States on trade.
Speaker 1 (02:24):
We might not have one for a long time. We
don't know.
Speaker 4 (02:27):
There's so much uncertainty and so that's really weighing on
stock markets around the world, including in Australia. So it's
really important to keep that in mind. Until those big
global pressures are resolved in some way, the volatility we're
seeing may well continue regardless of the outcome for the
Australian election.
Speaker 3 (02:49):
Yeah, that's a really good point. I'm not sure I
can think of a more turbulent time. Were not in
recent history anyway, When for an Australian election backdrop, okay, rich,
I want you to imagine that it's Monday morning of
May the fifth, You're heading into work, bright eyed and
(03:10):
bushytailed as usual, and you know who's won the election.
If it's Labor, what can we expect to see in
terms of market moves and what about the coalition?
Speaker 4 (03:22):
There's a really good body of evidence that shows, you know,
on the margins that during a campaign, investors sort of
enter this holding pattern, markets enter this holding pattern, and
then once you get a result, there's more clarity.
Speaker 1 (03:38):
And on that Monday there's a bit of a bounce.
Speaker 4 (03:40):
The differences in policies are quite specific, so there's no
huge gaping gap in terms of the anticipated financial market
reaction between either party, but there are quite a few
interesting specifics.
Speaker 1 (03:58):
And some things that are even shared.
Speaker 4 (04:00):
For instance, the support for gas output by both of
the major parties will probably offer some support to providers
like Woodside and Santos, you know. On the on the
profity property fronts, uh, there's there's support for for house
building and spending on that, so that that could support
(04:23):
companies like Mervak or Stockland or lend Lease according to
Bloomberg Intelligence, some some work that's been done there. And
also on the banking side, there might be you know,
support for a loan growth if we get that clarity.
Speaker 1 (04:37):
Of a of a result.
Speaker 4 (04:38):
So there's a few different dynamics at play here that
that separate the parties, but also that that they share. Renewables,
the question mark over nuclear energy is another one. Obviously,
the coalition offering this idea about nuclear energy that could
walk back some of the progress made on renewables. That
would hurt companies operating in that space and potentially banks
(05:00):
that lend to renewables projects as well.
Speaker 3 (05:04):
Yeah, you made the all important point back there. If
we get clarity, clarity of a result which doesn't always happen.
Many people are predicting a hung parliament where no party
has a sufficient majority to form government instead has to
negotiate with smaller parties or independents. What tends to happen
(05:26):
in these situations markets wise.
Speaker 4 (05:29):
Well, that kind of outcome has been described by Shane
Oliver at AMP Capital as the greatest risk facing investors
in this election. As you've identified, the elevated power of
smaller parties will enable them to push through their own agendas,
(05:49):
and that could lead some to walk away from some
of the reforms in terms of productivity that many are
hoping to see.
Speaker 1 (06:00):
So in the in the.
Speaker 4 (06:02):
Example of labor requiring support from smaller parties, that is
broadly seen, at least by AMP Capital as being less
business friendly, which could hurt markets on the margins. But again,
the outcome of a hung parliament would not be very
welcomed by financial markets because of that lingering uncertainty and
(06:23):
also a less clarity on the policy agenda.
Speaker 3 (06:28):
Yeah, and those negotiations can can go on for weeks,
which is not particularly helpful in this environment. I would
imagine which are the two main parties have traditionally seen
the strongest stock market growth when being in government.
Speaker 1 (06:46):
This is such a wonderful question.
Speaker 4 (06:48):
It's a very vexed question because you know, just like
on that Monday, when we know the results or the
absence of a result, whether some clarity, you know, financial
markets are so responsive to what's happening around the world,
and you know Donald Trump, etc. That is very hard
to make grand pronouncements over. You know, the stock market
(07:11):
does better under.
Speaker 1 (07:12):
The coalition or under labor.
Speaker 4 (07:15):
That said, the evidence does point to coalition being you know,
to the stock market performing better under the coalition. Data
from Bloomberg Intelligence from nineteen eighty shows that the stock market,
the Australian stock market has ridden ten percent on average
each year under a coalition in the year after a
(07:36):
coalition victory versus seven point five percent under labor. But
it's really difficult because you know, if you think back
to the global financial crisis, that was Rudd and Gillard. Obviously,
you know they didn't really have any impact on the
on the crisis, but they weather the symptoms of that
in terms of markets falling, and the same for a
(07:58):
GoF whitlam with the oil crisis in the early nineteen
seventies which hurt financial markets. So it's a bit of
a vex question. But the data does point to the
Coalition supporting the stock market more than labor.
Speaker 3 (08:11):
That's really interesting those stats. Do we know why? I mean,
is it just a case that the coalition has perceived
as more business friendly or is there something a bit more,
a bit more scientific.
Speaker 4 (08:23):
I think, you know, I think really it is to
do with the global environment and it doesn't really have
a huge reflection on It isn't a huge reflection on
the domestic policies. One outlier, for instance, is the hawk
Keating government. The Australian stock market went up more than
seventeen percent per annum under that government, according to amp
(08:47):
Capital data, So you know, that really kind of disproves
the theory in a way that labor is less business
friendly or less markets friendly. And that was a very
reformist government, of course, So it's a very tricky data
set to get a really strong grip on, and again
it really is influenced by all these other factors overseas.
Speaker 3 (09:09):
Yep, when we come back, what else should you be
closely watching? After next weekend's result. Welcome back to the
Bloomberg Australia podcast. You're here with me Chris Burke, and
I'm talking to Rich Henderson, our cross asset reporter based
in Melbourne. We're talking about how we can expect stocks
(09:31):
and and other investments to react or in some cases
not react to the results of the May three election. Rich.
I know we're Bloomberg and we're all about financial markets,
but I want to know. I would love to know
what are the current odds at the betting shop of
alban Easy winning versus a dozen victory right now.
Speaker 4 (09:48):
I've actually just looked these up and I was actually shocked.
You know, one of the pre eminent betting companies in Australia.
The odds they're giving is there's a dollar twenty for
a victory for Anthony Albanesi to become the next Prime
minister following the election, against four dollars fifty for Peter
(10:10):
Dutton and a coalition victory. So it's a very you know,
the betting odds are basically saying Albo is a lock.
There's a separate, separate odds I've looked at from a
different company that are available on the Bloomberg Terminal. They're
showing an eighty three percent chance of victory for Albanesi
(10:30):
versus fifteen percent for Peter Dutton. But you've really got
to take these numbers with a big pinch of salt,
because there is a quite a compelling body of evidence
showing that single bets or small group of bets can
have a big impact on these numbers. They can really
(10:51):
distort them, and so they shouldn't really be relied upon.
These are not poles, you know. These are not polsters
going out and asking people who are you going to
vote for? These are betters, gamblers trying to make money
on the outcome, and the odds reflect the number of
people betting and the direction of those bets. So very
tricky to get a read. But I was really surprised
(11:13):
at the certainty these betting odds are showing.
Speaker 3 (11:17):
Yeah, those odds are something else. Have you placed your bet?
Speaker 1 (11:20):
No? No, I'm definitely not a gambler.
Speaker 3 (11:23):
Okay, let's move on to let's move on to bets
that you're a bit more familiar with the Aussie dollar.
It's been on a roller coaster ride in the past
month or so. What's going on there? And can we
expect the election to impact that at all.
Speaker 4 (11:37):
Well, this is another great example of those outside foreign
influencers taking precedents over any election related impact on an
asset or a currency, in this case the dollar. The
Australian dollar is really responsive to all the uncertainty that's
coursing through the globe right now regarding trade and tariff
(12:00):
from the United States, and so we've seen some dollar weaknessing,
some dollar weakness rather some strength and the US dollar
really it's going to be a reflection of Australia's place
in the world, and you know, potentially some weakness from
tariff's hitting Australia or tariff's hitting China that we can
(12:22):
the Australian economy by extension. But also there's some benefit
potentially to the Australian dollar by investors turning away from
the primacy of the US dollar. Its status as a
reserve currency, a haven in times of uncertainty has been
eroded a little bit in the last few weeks as
(12:42):
Donald Trump has engaged in this trade war, and also
he's walked back these comments, but he did take aim
at Jerome Powell, the Chairman of the Federal Reserve and
threatened at one point to fire him, or at least
said he was considering this. This sent a real shockwave
through global financial markets. Investors got a bit nervous about
the independence of the Federal Reserve and that's a really
(13:04):
big deal for investors, And so that weekend the dollar.
Trump has walked those comments back. But that's some of
the crosswinds that are making any read on the impact
on the Australian dollar very hard. But again, these are
global impacts that are taking precedents over anything domestic or
election related in Australia.
Speaker 3 (13:25):
Yeah, and government bonds have been a big part of
the story as well. Your yields have been jumping all
over the place and a Trump's tariff drama. Does the
Australian election factor into any of these moves do you think?
Speaker 1 (13:38):
Not so much the election.
Speaker 4 (13:40):
But these are really important assets investments to keep an
eye on. One thing that is front of mind for
investors now with all these trade tensions, etc. Is that
if we do see recession, global recession, a slow down
in growth, then the RBA, the Reserve Bank of Australia
(14:02):
will have to cut rates. You know, this is a
very almost mathematical function. It will need to trigger some
sort of growth in Australia, and obviously rates are elevated
because inflation is still an issue that they're tackling. But
that is a mechanism by which the RBA can try
and support growth in Australia. So we may get rate
(14:23):
cuts if we do see the trade war last a while,
and you know, these global trade relationships reform, so we
could anticipate some more rate cuts and faster cuts in
a scenario where growth starts are slow.
Speaker 3 (14:40):
Okay, So there, as you say, there are plenty of
plenty of investments to be keeping our eye on in
the coming days and weeks. But any real moves from
the election, I guess will come from a shock result
or a messy hung parliament that could take weeks to decide.
Speaker 1 (14:58):
I think so yeah.
Speaker 4 (14:59):
And I think another key point is that, you know,
because Trump is having such a big impact on financial markets,
because he's trying to refashion some of these really key
relationships between the United States and its top trading partners.
Whoever wins the Australian election, whether it's Peter Dutton or
(15:20):
Anthony Albersi, they will have to deal with this. They
will have to really find a way of navigating through
this uncertainty, whether that's from the relationship with the United States,
that diplomatic relationship, or whether we see a big slowdown
in China and they have to try and keep Australia
on some sort of growth trajectory. That's going to be
(15:41):
such a big challenge. So I think that's a really
important thing to think about when we think about the
impact of the election and the result.
Speaker 3 (15:50):
On that note, are there any investments out there that
are trump proof? Wow?
Speaker 1 (15:56):
That is a very good question.
Speaker 4 (15:57):
Gold has been incredibly trump proof these past few weeks.
We've seen, you know, successive record highs in the gold price.
That's obviously a traditional haven asset. You know, that's a
reflection of all this uncertainty. So that's one that comes
to mind instantly. You know, stocks have been whipswing around,
(16:19):
they haven't completely tanked, and investors are hoping for some
reprieve there. So we could see a bounce in stock
prices in the US that could flow onto Australia. But
it's very hard to read through some of these crosswinds.
Speaker 3 (16:33):
Okay, thank you rich Anderson, and thank you for listening
to the Bloomberg Australia podcast I'm Chris Bert. This episode
was recorded on the traditional lands of the Wurunduri people
of the Kula Nation. It was produced by Paul Allen
and edited by Ainsley Chandler, Rebecca Jones and Adam A.
Don't forget to follow and review the show wherever you
(16:53):
get your podcasts, and sign up to Bloomberg's free daily newsletter,
Australia Briefing. Go to bloomberg dot com to subscribe.
Well, it's can be pretty tired.
Speaker 2 (00:05):
But you can't really judt the polling though, because you know,
there's been elections where the polls are being completely wrong.
When Scott Morrison won, when John Howard won, the polls
never indicated that they would win, you know, So it's
it's anyone's race.
Speaker 3 (00:19):
I think as early voters start heading to the polls,
the election outcome is looking as unpredictable as the current
state of financial markets. In the days and weeks after
next Saturday's result, will the investment backdrop become any clearer
for Australia. Hello, I'm Chris Burk and welcome to the
Bloomberg Australia Podcast. The election is just days away, but
(00:43):
one thing continues to weigh on australians minds more than
anything else. You guessed at Donald Trump. The US president's
erratic tariff drama has drowned out much of the debate
and instead made Australians more anxious as turbulent stock markets
shake up their super fan balances. But let's not forget
there are some policy changes being proposed by both Prime
(01:04):
Minister Anthony and Albanezi and Coalition leader Peter Dutton, and
some of those policies could potentially impact stocks, the Aussie dollar,
and investments. You may not have even thought about to
discuss all this. I'm pleased to welcome back Bloomberg's Melbourne
based cross asset reporter Richard Henderson.
Speaker 1 (01:22):
Hello, rich Have you cast your vote yet? Not yet? No,
I'm going to wait for the big day.
Speaker 3 (01:28):
Well, I guess you haven't had a lot of time
to get in the early voting with all those daily
markets swings and roundabouts keeping you very busy right now.
Speaker 4 (01:37):
Exactly, can barely barely step away from from the seminal.
Speaker 3 (01:40):
Can you, first of all just give us an overview
of what stock markets are looking like right now and
what the biggest drivers are of that are.
Speaker 4 (01:50):
Well, we're still caught in this huge volatile moment and
the Australian election is happening really at this momentous time
for globalizer for capitalism around the world. You know, Donald
Trump's tariff a gender threatens to rewire a global trade
and that has a huge impact for many countries around
(02:11):
the world, including Australia. China, Australia's largest trading partner, is
one of the biggest concerns. We still don't have a
deal between China and the United States on trade.
Speaker 1 (02:24):
We might not have one for a long time. We
don't know.
Speaker 4 (02:27):
There's so much uncertainty and so that's really weighing on
stock markets around the world, including in Australia. So it's
really important to keep that in mind. Until those big
global pressures are resolved in some way, the volatility we're
seeing may well continue regardless of the outcome for the
Australian election.
Speaker 3 (02:49):
Yeah, that's a really good point. I'm not sure I
can think of a more turbulent time. Were not in
recent history anyway, When for an Australian election backdrop, okay, rich,
I want you to imagine that it's Monday morning of
May the fifth, You're heading into work, bright eyed and
(03:10):
bushytailed as usual, and you know who's won the election.
If it's Labor, what can we expect to see in
terms of market moves and what about the coalition?
Speaker 4 (03:22):
There's a really good body of evidence that shows, you know,
on the margins that during a campaign, investors sort of
enter this holding pattern, markets enter this holding pattern, and
then once you get a result, there's more clarity.
Speaker 1 (03:38):
And on that Monday there's a bit of a bounce.
Speaker 4 (03:40):
The differences in policies are quite specific, so there's no
huge gaping gap in terms of the anticipated financial market
reaction between either party, but there are quite a few
interesting specifics.
Speaker 1 (03:58):
And some things that are even shared.
Speaker 4 (04:00):
For instance, the support for gas output by both of
the major parties will probably offer some support to providers
like Woodside and Santos, you know. On the on the
profity property fronts, uh, there's there's support for for house
building and spending on that, so that that could support
(04:23):
companies like Mervak or Stockland or lend Lease according to
Bloomberg Intelligence, some some work that's been done there. And
also on the banking side, there might be you know,
support for a loan growth if we get that clarity.
Speaker 1 (04:37):
Of a of a result.
Speaker 4 (04:38):
So there's a few different dynamics at play here that
that separate the parties, but also that that they share. Renewables,
the question mark over nuclear energy is another one. Obviously,
the coalition offering this idea about nuclear energy that could
walk back some of the progress made on renewables. That
would hurt companies operating in that space and potentially banks
(05:00):
that lend to renewables projects as well.
Speaker 3 (05:04):
Yeah, you made the all important point back there. If
we get clarity, clarity of a result which doesn't always happen.
Many people are predicting a hung parliament where no party
has a sufficient majority to form government instead has to
negotiate with smaller parties or independents. What tends to happen
(05:26):
in these situations markets wise.
Speaker 4 (05:29):
Well, that kind of outcome has been described by Shane
Oliver at AMP Capital as the greatest risk facing investors
in this election. As you've identified, the elevated power of
smaller parties will enable them to push through their own agendas,
(05:49):
and that could lead some to walk away from some
of the reforms in terms of productivity that many are
hoping to see.
Speaker 1 (06:00):
So in the in the.
Speaker 4 (06:02):
Example of labor requiring support from smaller parties, that is
broadly seen, at least by AMP Capital as being less
business friendly, which could hurt markets on the margins. But again,
the outcome of a hung parliament would not be very
welcomed by financial markets because of that lingering uncertainty and
(06:23):
also a less clarity on the policy agenda.
Speaker 3 (06:28):
Yeah, and those negotiations can can go on for weeks,
which is not particularly helpful in this environment. I would
imagine which are the two main parties have traditionally seen
the strongest stock market growth when being in government.
Speaker 1 (06:46):
This is such a wonderful question.
Speaker 4 (06:48):
It's a very vexed question because you know, just like
on that Monday, when we know the results or the
absence of a result, whether some clarity, you know, financial
markets are so responsive to what's happening around the world,
and you know Donald Trump, etc. That is very hard
to make grand pronouncements over. You know, the stock market
(07:11):
does better under.
Speaker 1 (07:12):
The coalition or under labor.
Speaker 4 (07:15):
That said, the evidence does point to coalition being you know,
to the stock market performing better under the coalition. Data
from Bloomberg Intelligence from nineteen eighty shows that the stock market,
the Australian stock market has ridden ten percent on average
each year under a coalition in the year after a
(07:36):
coalition victory versus seven point five percent under labor. But
it's really difficult because you know, if you think back
to the global financial crisis, that was Rudd and Gillard. Obviously,
you know they didn't really have any impact on the
on the crisis, but they weather the symptoms of that
in terms of markets falling, and the same for a
(07:58):
GoF whitlam with the oil crisis in the early nineteen
seventies which hurt financial markets. So it's a bit of
a vex question. But the data does point to the
Coalition supporting the stock market more than labor.
Speaker 3 (08:11):
That's really interesting those stats. Do we know why? I mean,
is it just a case that the coalition has perceived
as more business friendly or is there something a bit more,
a bit more scientific.
Speaker 4 (08:23):
I think, you know, I think really it is to
do with the global environment and it doesn't really have
a huge reflection on It isn't a huge reflection on
the domestic policies. One outlier, for instance, is the hawk
Keating government. The Australian stock market went up more than
seventeen percent per annum under that government, according to amp
(08:47):
Capital data, So you know, that really kind of disproves
the theory in a way that labor is less business
friendly or less markets friendly. And that was a very
reformist government, of course, So it's a very tricky data
set to get a really strong grip on, and again
it really is influenced by all these other factors overseas.
Speaker 3 (09:09):
Yep, when we come back, what else should you be
closely watching? After next weekend's result. Welcome back to the
Bloomberg Australia podcast. You're here with me Chris Burke, and
I'm talking to Rich Henderson, our cross asset reporter based
in Melbourne. We're talking about how we can expect stocks
(09:31):
and and other investments to react or in some cases
not react to the results of the May three election. Rich.
I know we're Bloomberg and we're all about financial markets,
but I want to know. I would love to know
what are the current odds at the betting shop of
alban Easy winning versus a dozen victory right now.
Speaker 4 (09:48):
I've actually just looked these up and I was actually shocked.
You know, one of the pre eminent betting companies in Australia.
The odds they're giving is there's a dollar twenty for
a victory for Anthony Albanesi to become the next Prime
minister following the election, against four dollars fifty for Peter
(10:10):
Dutton and a coalition victory. So it's a very you know,
the betting odds are basically saying Albo is a lock.
There's a separate, separate odds I've looked at from a
different company that are available on the Bloomberg Terminal. They're
showing an eighty three percent chance of victory for Albanesi
(10:30):
versus fifteen percent for Peter Dutton. But you've really got
to take these numbers with a big pinch of salt,
because there is a quite a compelling body of evidence
showing that single bets or small group of bets can
have a big impact on these numbers. They can really
(10:51):
distort them, and so they shouldn't really be relied upon.
These are not poles, you know. These are not polsters
going out and asking people who are you going to
vote for? These are betters, gamblers trying to make money
on the outcome, and the odds reflect the number of
people betting and the direction of those bets. So very
tricky to get a read. But I was really surprised
(11:13):
at the certainty these betting odds are showing.
Speaker 3 (11:17):
Yeah, those odds are something else. Have you placed your bet?
Speaker 1 (11:20):
No? No, I'm definitely not a gambler.
Speaker 3 (11:23):
Okay, let's move on to let's move on to bets
that you're a bit more familiar with the Aussie dollar.
It's been on a roller coaster ride in the past
month or so. What's going on there? And can we
expect the election to impact that at all.
Speaker 4 (11:37):
Well, this is another great example of those outside foreign
influencers taking precedents over any election related impact on an
asset or a currency, in this case the dollar. The
Australian dollar is really responsive to all the uncertainty that's
coursing through the globe right now regarding trade and tariff
(12:00):
from the United States, and so we've seen some dollar weaknessing,
some dollar weakness rather some strength and the US dollar
really it's going to be a reflection of Australia's place
in the world, and you know, potentially some weakness from
tariff's hitting Australia or tariff's hitting China that we can
(12:22):
the Australian economy by extension. But also there's some benefit
potentially to the Australian dollar by investors turning away from
the primacy of the US dollar. Its status as a
reserve currency, a haven in times of uncertainty has been
eroded a little bit in the last few weeks as
(12:42):
Donald Trump has engaged in this trade war, and also
he's walked back these comments, but he did take aim
at Jerome Powell, the Chairman of the Federal Reserve and
threatened at one point to fire him, or at least
said he was considering this. This sent a real shockwave
through global financial markets. Investors got a bit nervous about
the independence of the Federal Reserve and that's a really
(13:04):
big deal for investors, And so that weekend the dollar.
Trump has walked those comments back. But that's some of
the crosswinds that are making any read on the impact
on the Australian dollar very hard. But again, these are
global impacts that are taking precedents over anything domestic or
election related in Australia.
Speaker 3 (13:25):
Yeah, and government bonds have been a big part of
the story as well. Your yields have been jumping all
over the place and a Trump's tariff drama. Does the
Australian election factor into any of these moves do you think?
Speaker 1 (13:38):
Not so much the election.
Speaker 4 (13:40):
But these are really important assets investments to keep an
eye on. One thing that is front of mind for
investors now with all these trade tensions, etc. Is that
if we do see recession, global recession, a slow down
in growth, then the RBA, the Reserve Bank of Australia
(14:02):
will have to cut rates. You know, this is a
very almost mathematical function. It will need to trigger some
sort of growth in Australia, and obviously rates are elevated
because inflation is still an issue that they're tackling. But
that is a mechanism by which the RBA can try
and support growth in Australia. So we may get rate
(14:23):
cuts if we do see the trade war last a while,
and you know, these global trade relationships reform, so we
could anticipate some more rate cuts and faster cuts in
a scenario where growth starts are slow.
Speaker 3 (14:40):
Okay, So there, as you say, there are plenty of
plenty of investments to be keeping our eye on in
the coming days and weeks. But any real moves from
the election, I guess will come from a shock result
or a messy hung parliament that could take weeks to decide.
Speaker 1 (14:58):
I think so yeah.
Speaker 4 (14:59):
And I think another key point is that, you know,
because Trump is having such a big impact on financial markets,
because he's trying to refashion some of these really key
relationships between the United States and its top trading partners.
Whoever wins the Australian election, whether it's Peter Dutton or
(15:20):
Anthony Albersi, they will have to deal with this. They
will have to really find a way of navigating through
this uncertainty, whether that's from the relationship with the United States,
that diplomatic relationship, or whether we see a big slowdown
in China and they have to try and keep Australia
on some sort of growth trajectory. That's going to be
(15:41):
such a big challenge. So I think that's a really
important thing to think about when we think about the
impact of the election and the result.
Speaker 3 (15:50):
On that note, are there any investments out there that
are trump proof? Wow?
Speaker 1 (15:56):
That is a very good question.
Speaker 4 (15:57):
Gold has been incredibly trump proof these past few weeks.
We've seen, you know, successive record highs in the gold price.
That's obviously a traditional haven asset. You know, that's a
reflection of all this uncertainty. So that's one that comes
to mind instantly. You know, stocks have been whipswing around,
(16:19):
they haven't completely tanked, and investors are hoping for some
reprieve there. So we could see a bounce in stock
prices in the US that could flow onto Australia. But
it's very hard to read through some of these crosswinds.
Speaker 3 (16:33):
Okay, thank you rich Anderson, and thank you for listening
to the Bloomberg Australia podcast I'm Chris Bert. This episode
was recorded on the traditional lands of the Wurunduri people
of the Kula Nation. It was produced by Paul Allen
and edited by Ainsley Chandler, Rebecca Jones and Adam A.
Don't forget to follow and review the show wherever you
(16:53):
get your podcasts, and sign up to Bloomberg's free daily newsletter,
Australia Briefing. Go to bloomberg dot com to subscribe.
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