Pimco Says Australian Poll Means Higher Risk Premiums

Australia’s national election deadlock means investors will demand higher returns to hold the nation’s riskier assets, said Pacific Investment Management Co.

The Aug. 21 poll failed to deliver a parliamentary majority to either of the main parties for the first time in 70 years, meaning Prime Minister Julia Gillard or opposition leader Tony Abbott need the backing of independent lawmakers to form a government. Australia’s currency fell 0.3 percent to 89.13 U.S. cents as of 2:43 p.m. in Sydney.