Australia has a new left-leaning government

Ross J Burland FXStreet

Markets will be walking on Monday to a new government in Australia, whose new leaders are yet to be sworn in following the Labor Party's victory Saturday.

In what is a seismic shift in its politics, the Aussie currency traders will be weighing the implications for markets following almost a decade of conservative leaders and voters that are fed up with the two-party system. Voters have turned their back on the ruling coalition, instead are now backing those who campaigned for more action on climate change, greater gender equality and political integrity.

''The impact of the outcome will most likely be felt the most in fiscal policy, as Shadow Treasurer Chalmers has promised greater spending if Labor returns to power,'' analysts at Brown Brothers Harriman argued.

However, the main focus for the Aussie currency is on the central bank. Data of late likely has not met the governor's threshold of there needing to be “a very strong argument” for the RBA to “deviate” from moves of 25bp in coming months, analysts at ANZ Bank said.

''Still, we think the option of a 40bp move will be considered at the RBA’s June meeting before a move of 25bp is chosen.''

For the week ahead, Chris Kent, Assistant Governor (Financial Markets), will speak at the Kanganews DCM Summit on 23 May, while Luci Ellis, Assistant Governor (Economic), will speak at the UDIA National Conference on 25 May.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.