A snippet from Société Générale overnight on the New Zealand election
- The final vote tally in New Zealand has awarded the Labour and Green parties a seat each, thus giving the left-wing parties just two seat short of the ruling National Party.
- Both sides have the potential to form a coalition government with the NZ First Party.
- The political uncertainty has seen the Kiwi dollar sag last week.
- A Labour-Green-NZ First coalition would be the most negative scenario for NZD because it would likely result in a push for a more growth-oriented monetary policy mandate. More upside ahead for AUD/NZD in coming days.
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ps. There is an end in sight for this ongoing NZ election saga ... October 12 should see a decision by the 'kingmaker' NZ First party leader Winston Peters. His party holds the balance of power, he'll decide which side to support - the Nationals or Labour/Greens
