Election betting: Labor only luke warm favourites

Sat, 15 Jul 2017  |  

Despite the turmoil within the Liberal Party and the unrelenting information in the polls showing Labor with a 6 or 8 point lead, the betting markets show Labor to be only luke warm favourites to win the next Federal election.

The current odds for the election, which is likely to be held in the latter part of 2018, but could be held in the first half of 2019are:

Labor  $1.60

Coalition $2.30

Allowing for the bookies margin, the odds show that Labor are a 60 per cent chance to win, with the Coalition 40 per cent. 

With such a long time to go until the election is called, punters are clearly sitting back and waiting for polling day to get closer before placing their wagers. And up to two years is a long time to have money tied up in a bet. Having said that, if Labor are the near certainties that many of the pundits are suggesting, a 60 per cent return from a bet on Labor, over two years, is a great return. That said, for those thinking a stronger economy, a return to budget surplus and a cooling in Liberal Party infighting will see it sneek back in, 130 per cent over two years is extraordinary. 

Or maybe it is the shock of the recent Brexit and US Presidential elections that are keeping punters at bay, at least until the election dates gets nearer.

 

 

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The downside of the Aussie dollar going up again

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The downside of the Aussie dollar going up again

The Australian dollar has powered to a two year high above 78 US cents with the rise mainly driven by a sharp fall in the US dollar, amid signs of weaker economic growth in the US.

For some Australian economists, this rise of the Australian dollar, if sustained, is reckoned to be a restrictive force for the Australian economy which risks snuffing out some of the recent economic news pointing to a moderate pick-up in activity.

While a higher value for the Australian dollar does generally trim the rate of economic growth as lower priced imports take business away from local producers and exporters find it a little harder to compete in the international trade market, there are some good reasons to think the current Australian dollar rise will not be a major problem.

Think of it this way.

If the Australia dollar was in fact ‘over-valued’, how would this show up in the real world or the real economy?

In an environment of a floating exchange rate for the Australian dollar, the answer is rather simple.