Results are coming in from the parliamentary elections in New Zealand and the results show a victory for the National Party, giving Prime Minister John Key a third term in office. Markets like continuity and certainty as well as market oriented governments.
This was not unexpected, but the actual results could even be better: National is en route to win an absolute majority in parliament, with 61 out of 121 seats, making policy making easier, even if Key opts to form a coalition with a few small parties.
The victory comes on the backdrop of strong economic growth, as we just learned against last week with the release of the better than expected growth figures for Q2.
In his victory speech, Key was generous with his finance minister Bill English, and called him “the best finance minister in the developed world”. Another term in office for English alongside Key is another positive for markets.
NZD/USD had a tough time recently, falling on the desire of the RBNZ to see a weaker currency and the upcoming tightening in US monetary policy. The pair could enjoy a rebound, at least early in the week.
Stay tuned for the weekly NZD/USD forecast coming later on during the weekend.