AUD: Will Australia catch a bout of the political plague? – ING

In view of economists at ING, Australia may face a period of political uncertainty if the High Court rules against the parliamentary eligibility of seven lawmakers with dual citizenship.

Key Quotes

“With a wafer thin coalition majority, much hangs on whether the High Court rules against Deputy Prime Minister Joyce, and requires him to stand in a special by-election. In any event, the chaos surrounding this issue is hurting the Turnbull government. AUD markets remain unmoved for now, but political vultures are beginning to circle.”

“The 2Q construction work done and private capex data (Thursday) will be the standout releases in a quiet Australian calendar this week. While the RBA expect some pickup in non-mining business investment, the central bank may have to wait for any convincing evidence of this. A 'lowflation' economy is pretty much priced into the AUD curve, meaning any disappointing investment data this week - and possible downside risks to 2Q GDP - should have a limited negative impact.”