Weekly Asset Heatmap

Weekly Asset Heatmap: New Zealand

In a month under the leadership of 37-year-old political phenom Jacinda Ardern, the Labour Party has all but erased the National Party's 20-point lead in the polls. With less than three weeks until election day, our signals point to a big move in the kiwi in the next two weeks.

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Our signals suggest a big move in the New Zealand dollar in the next two weeks.

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Salient threads in the digital debate driving this movement include:
  • New polls show Labour's meteoric rise since Jacinda Ardern became party leader on August 1 has continued, a result consistent with Predata's digital momentum analysis at the end of last month.
  • Consequently, a flummoxed National Party, at risk of falling out of government for the first time in nine years, is appealing to its base with tough-on-crime policies such as boot camps for youth delinquents and depriving rights to gang members.
  • The latest RBNZ figures on mortgage borrowing will raise questions about when the central bank will loosen the loan-to-value ratio. Though outgoing Governor Graeme Wheeler indicated this week that any such move is not imminent, both Prime Minister Bill English and Ardern have expressed concern, suggesting either a National or Labour government could push the issue forward after this month's election.
At the time of writing, the USD/NZD was trading at 0.71663 with a forward implied rate of 0.7100.
New Zealand 10-yr yields are currently 2.860%.
The RBNZ next meets on September 28.