This is a guest post from Hugo Gerard of Betmetrix, a real-time betting markets aggregator run by two former RBA economists which analyses hourly data on current events.
– Prediction markets downgraded Labor’s election chances by around 7 percentage points in the days following the announcement of the government’s asylum seeker deal with PNG.
– Around half of this downgrade was taken back once the most recent Galaxy poll highlighted some of the duelling electoral impacts of asylum seeker policy.
– Nevertheless, in net terms, Labor remains down on the past fortnight, and the Coalition remains firm favourite to win the coming election.
Betting markets downgraded Labor’s election chances by 7 percentage points following the 19 July announcement of the government’s asylum seeker arrangements with Papua New Guinea. Markets have seemingly been suspicious that Labor’s resurgence would stall short of an election winning lead, and immediately viewed the PNG deal as something that could mark the beginning of the end for Rudd’s honeymoon, downgrading Labor’s chances by over 2 percentage points. These suspicions were reinforced by the release of the latest Newspoll numbers which, while suggesting only a within-margin-of-error 1 per cent fall in Labor’s primary vote, suggested a five point rise in dissatisfaction with Rudd. Following the release, Labor’s chances were downgraded by a further five percentage points.
However, around half of this downgrade was taken back following the release of the latest Galaxy poll which suggested that Labor’s primary vote had climbed to its highest level since the 2010 election, and that the PNG deal had neutralised one of the Coalition’s key lines of attack, with Labor moving ahead of the Coalition as the party viewed as best able to handle asylum seeker policy.
To date, the varying influences of the asylum seeker announcement – including potential gains or losses in marginal electorates – seem to have played out slightly in the Coalition’s favour, though market participants will likely be keeping a watchful eye on any new polling results that shed new light on the issue.
All in all, Labor’s election chances are down just under 4 percentage points from a fortnight ago, and political markets are giving the Coalition a more than 70 per cent chance of winning the coming election.
BetMetrix, a joint project of two ex-RBA economists, has built a real time indicator that tracks the probability of each major party winning the 2013 Federal Election using price data from Australia’s only real “political markets” (online betting markets).
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