It was announced over the weekend that Australia will hold Federal elections on 21st August. The main campaign issues will be the mining tax, climate change policy, and the stance toward asylum seekers. The strong economy points to the ruling Labor Party coming out on top but, probably, with a reduced majority. We still expect that the Reserve Bank (RBA) will hike the cash rate soon, although the election campaign means that the next move could well come in September rather than in August.