NZ: Real risks from US elections, but also good reasons not to panic - ANZ

Research Team at ANZ, suggests that the US election is the focus this week but there are real risks to New Zealand, but also good reasons not to panic.

Key Quotes

“The endgame for the political posturing and populist pushback is not good for the global economy and microeconomic policy settings. But microeconomics takes time to influence macroeconomic direction and it’s a thematic that will just need to be dealt with.

The RBNZ will cut the OCR this week because it has said it will, but strong economic data and signs of a turn in inflation suggest a risk they could be overcooking it. Risks of further cuts remain, but in our view this would require an ugly event offshore (for which there are plenty of candidates, admittedly). Data this week should continue to flag that domestic economic momentum is strong, but that housing momentum has topped out courtesy of the LVR restrictions and affordability constraints.”