New Zealand finally has a new centre-right coalition Government to replace the outgoing Labour administration. It plans tax cuts, spending cuts and a tweak to the Reserve Bank’s targets.
In our bonus deep-dive interview, ANZ’s Group Chief Economist Richard Yetsenga maps out the week ahead in global markets and economics, including whether investors are being too optimistic about a soft landing.
5 things to know
Global markets were quiet over Thanksgiving. WTI oil fell another 2.5% to US$75.17/bbl after an OPEC+ production cutting meeting was delayed. The A$ opens this morning at 65.82 USc and the NZ$ at 60.73 USc. Gold is at US$2,003/oz.
New Zealand’s new coalition Government plans to cut taxes and cut spending. ANZ NZ Chief Economist Sharon Zollner takes a closer look at the coalition deals.
The National-ACT-NZ First Coalition has dropped plans for a 15% tax on foreign buyers of homes worth more than $2 million, but it will increase spending cuts.
Sharon says the changes won’t affect New Zealand’s fiscal or monetary policy trajectories much, but there is a tightening of the Reserve Bank’s focus on inflation, which was expected.
NZ core retail sales volumes rose 1.0% in Q3, which was stronger than expected, but not strong enough to budget the RBNZ, says ANZ NZ Senior Economist Miles Workman.
Cheers
Bernard
PS: Look out tomorrow for a deep dive interview with ANZ Australia Economist Blair Chapman about a new way to measure just how tight Australia’s labour market is, and therefore whether the RBA should raise, or cut its cash rate.
