The policies espoused by the Labour Party are suddenly in focus today after it was announced it had reached an agreement with New Zealand First to form a government. It means the largest single party - National, with 44.4% of the vote - will be in opposition.
One difference with National that now becomes more realistic is the Labour Party policy of altering the mandate of the RBNZ to include a full employment component, essentially copying the Fed's dual mandate. That would certainly raise the prospect of looser policy ahead. However, with the unemployment rate at 4.8%, it is unlikely a change in mandate would alter near-term expectations on the policy outlook.
The New Zealand dollar was already the worst performing G10 currency versus the dollar so we would be surprised to see notable further selling after today's sizable drop.
Source: Bloomberg Pro Terminal
Jr Trader Alexander Kumanov
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.