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Peters Triumphant; Key Weakens; Shaw Emerges



Friday 27 March 2015




NZ First leader Winston Peters is expected to win the Northland by-election tomorrow with a majority of 1394, according to the combined wisdom of the 8000+ registered traders on New Zealand’s predictions market, iPredict. Prime Minister John Key’s position has weakened, and he now has only a 32% probability of remaining National Party leader through to the end of 2017. James Shaw has emerged as a contender for the Green Party co-leadership, with a 27% probability of winning the job behind favourite Kevin Hague. The Official Cash Rate is now expected to remain on hold until January next year. Fonterra’s final payouts (before retentions) are expected to be $4.82 on 2014/15, rising to $6.10 in 2015/16 and $6.49 in 2016/17. National remains favoured to win the next General Electionwith 55% probability.

New Zealand Politics:

• NZ First leader Winston Peters is now overwhelmingly expected to win the Northland by-election (84% probability, up from 77% last week), ahead of National’s Mark Osborne (14% probability, down from 23%). Mr Peters’ majority is expected to be 1394

• James Shaw has emerged as a contender to be the next male co-leader of the Green Party, with 27% (up from 5% last week). Kevin Hague remains favoured with 62% probability (down from 90%)

John Key is strongly expected to remain National leader until at least the end of 2016 (88% probability, up from 77% last week) but just a 32% probability of remaining National leader until at least the end of 2017 (down sharply from 51% last week)

Andrew Little is overwhelmingly expected to remain Labour leader until at least the end of 2016 (97% probability, up from 82% last week) and has a 72% probability of remaining Labour leader until the end of 2017 (up from 39% last week). There is a 55% probability he will still be Labour leader by the end of 2020

• Stocks on who will be National and Labour leaders on Nomination Day for the next General Election have been launched today

• Paula Bennett remains favourite to become National Party leader if a vacancy arises(33%, up from 30% last week), followed by Steven Joyce (26%, up from 25%)

• Stocks on who is favoured to become Labour Party leader if a vacancy arises will be launched in the near future

Judith Collins expected to be appointed to Cabinet before next election (55% probability, down from 73% last week)

Next election expected in 2017 (92% probability, steady compared with last week)

• Forecast party vote shares at next election:

o National 45.1% (steady compared with last week)

o Labour 32.6% (up from 32.4%)

o Greens 11.0% (steady)

o NZ First 6.9% (steady)

o Others 4.4% (down from 4.6%)

• National expected to win 2017 General Election (55% probability, steady compared with last week)

• Almost no chance Wellington councils will be amalgamated by end of 2015 (only 6% probability they will be, down from 9% last week)

New Zealand Economics:

• Fruit-fly outbreak expected to be contained with fewer than 20 Queensland fruitfliesexpected to be found in New Zealand as part of current outbreak (79% probability, up from 65% last week)

• New Zealand dollar expected to reach parity with Australian dollar by the end of 2015 (57% probability, down from 62% last week) but not before July 2015 (23% probability, up from 12%)

• Quarterly GDP growth expected to be:

o 0.8% in the March quarter (up from 0.7% last week)

o 1.1% in the June quarter (steady)

o 1.1% in the September quarter (steady)

o 1.1% in the December quarter (steady)

• Annual growth expected to be 4.1% in the 2015 calendar year (up from 4.0% last week)

• Unemployment expected to be:

o 5.4% in the March quarter (steady compared with last week)

o 5.3% in the June quarter (steady)

o 5.2% in the September quarter (steady)

o 5.3% in the December quarter (steady)

• Current account deficit expected to be 3.6% of GDP in the March quarter (up from 3.5% last week), 3.5% in the June quarter (up from 3.4%) and 3.4% in the September quarter(steady)

• Annual inflation expected to be:

o 0.2% to end of March 2015 quarter (steady compared with last week)

o 0.4% to end of June 2015 quarter (steady)

o 0.6% to end of September 2015 quarter (down from 0.7%)

o 1.0% to end of December 2015 quarter (steady)

• Official Cash Rate priced to be:

o 3.488% on 30 April (down from 3.493% last week)

o 3.475% on 11 June (down from 3.480%)

o 3.455% on 23 July (down from 3.460%)

o 3.417% on 10 September (down from 3.419%)

o 3.395% on 29 October (steady)

o 3.377% on 10 December (down from 3.381%)

o 3.367% on 28 January 2016 (down from 3.371%)

o 3.364% on 10 March 2016 (up from 3.357%)

o 3.354% on 28 April 2016 (up from 3.347%)

o 3.344% on 9 June 2016 (up from 3.337%)

• This implies the OCR is more likely than not to be cut on 28 January to 3.25% (compared with 29 October last week) and to remain at that rate until at least 9 June 2016 (steady)

• 28% probability of a fiscal surplus in 2014/15 (down from 30% last week)

• Fiscal balance expected to be:

o -0.16% of GDP in 2014/15 (down from -0.11% last week)

o 0.80% of GDP in 2015/16 (steady)

o 1.98% of GDP in 2016/17 (steady)

o 2.43% of GDP in 2017/18 (up from 2.38%)

Fonterra’s final payout (before retentions) expected to be:

o $4.82 in 2014/15

o $6.10 in 2015/16

o $6.49 in 2016/17

Foreign Affairs/Constitution:

Next UK Parliament expected to consist of:

o Conservatives 37.9% of seats in the House of Commons (down from 38.0% last week)

o Labour 35.3% of seats (down from 35.4%)

o Nationalist parties 7.1% of seats (up from 6.8%)

o UKIP and similar 6.0% of seats (steady)

o Liberal Democrats 5.3% of seats (steady)

o Unionist parties 2.2% of seats (steady)

o Green and similar 2.1% of seats (steady)

o Independents and Speaker 2.1% of seats (steady)

o All others 2.2% of seats (steady)

• David Cameron expected to be prime minister after next UK election (63% probability, down from 65% last week)

Boris Johnson expected to be elected to UK House of Commons this year (91% probability, steady)

• Socialist Workers’ Party expected to defeat People’s Party in next Spanish election (71% probability, steady compared with last week)

• All Eurozone countries, including Greece, expected to remain in Euro in 2015 (23% probability of an announcement of a departure this year, up from 16% last week)

• New South Wales Liberal/National Coalition expected to win most seats in NSW state election (94% probability, up from 92% last week)

• Tony Abbott is expected to remain leader of the Australian Liberal Party until 1 July 2015(only 23% probability of departing before then, down from 27% last week) but be replaced asleader of the Australian Liberal Party by nomination day (50% probability Malcolm Turnbull will be leader on that day, steady compared with last week)

Bill Shorten expected to be Labor leader at next Australian federal election (88% probability, up from 87% last week)

• Liberals marginally ahead of Labor for next Australian Federal election in 2016 (53% probability of Liberal win, steady compared with last week)

• Hillary Clinton is favoured to be the Democratic Party’s nominee for US president in 2016 and to be elected to that office (47% probability, up from 44% last week). Jeb Bush has a 45% probability of being the Republican nominee (steady compared with last week) followed by Scott Walker (19% probability, steady)

• There is only a 17% probability New Zealand will sign the Trans-Pacific Partnership this year (down from 20% last week), and the Trans-Pacific Partnership is not expected to be ratified by the US Congress before 1 July 2017 (only 31% probability it will be, steady compared with last week)

• Helen Clark’s prospects of being the next UN Secretary General are 25% (up from 23% last week)

• There is a 10% probability New Zealand will become a republic by 2020 (steady compared with last week)

• Ireland to vote in favour of same-sex marriage before July 2015 (95% probability, steady compared with last week)

• There is an 18% probability Kim Jong-Un will cease being leader of North Korea before 2017 (steady compared with last week)


• iPredict Ltd is owned by Victoria University of Wellington. Details on the company and its stocks can be found at www.ipredict.co.nz.

• The weekly economic and political update is prepared by Exceltium Ltd on a pro bono basis and is based on a snapshot taken at a random time each week. This week’s was taken at 11.48 am today.


© Scoop Media

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