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Economic Weekly: And now for something completely different…

After four tumultuous years, a litany of eye-grabbing headlines and a countless number of tweets, the Trump era may now be nearing an end. After days of counting, most news agencies had seen enough in the key state of Pennsylvania and called the race for Joe Biden. As at the time of writing, Biden was building on his leads in both Pennsylvania and Georgia, and looked set to grab about 303 electoral college votes and win the nationwide popular vote by 4-6 million votes according to projections. That’s a fair way short of what polls suggested, but we pointed out last week that Biden’s lead was probably large and stable enough to withstand a substantial error and that’s proved correct.

Democrats also held onto the House of Representatives but look like they’ll be unable to overcome their geographic disadvantage in the Senate. For now, markets are taking that outcome in their stride, and the result saw a broad rally in equities after some pre-election anxieties (see chart below). Whilst the prospects for a big stimulus package are uncertain, markets are comforted by the fact that divided control will make big tax and regulatory changes unlikely. With a very different President in the White House, markets are probably hoping for a little more predictability too. Still, it’s not quite over just yet. As at the time of writing, President Trump is determined not to accept defeat and is challenging the result by whatever means he can. And remember, if all else fails, there’s always 2024…

This week, the domestic focus turns away from electoral politics and over to the very different world of monetary policy, with the RBNZ meeting on Wednesday. We expect the bank to leave its OCR, LSAP and forward guidance unchanged, but unveil further detail about its ‘Funding for Lending Programme’ or FLP, that will offer low-cost funding for banks. The bank is also likely to downplay the signs of life we’ve seen domestically, and highlight the headwinds facing global growth as COVID cases rise overseas. We still expect a negative OCR next year, but a lot will depend on the effectiveness of the FLP in delivering support, as well as the shape of the pandemic and its continuing economic impact. You can read our full preview here, and don’t forget to stay tuned for our review.

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Jane Turner

Senior Economist

Originally hailing from sunny Nelson, Jane moved to Auckland to join the ASB team in 2008.  As Senior Economist, Jane's main focus is co-ordinating the team’s macro-economic forecasts.  In this key role, Jane was thrilled by the team’s twice consecutive win of the Consensus Economics Forecast Accuracy award.   

During her decade-long career in economic forecasting, Jane has gained a thorough knowledge of the New Zealand economy.  Her current focus is on New Zealand GDP growth, including both manufacturing and the construction sectors.  She has spent time forecasting most sectors of the economy, including inflation, trade, housing, labour and financial markets.

Prior to joining ASB, Jane honed her macro-economic forecasting skills at the Reserve Bank of New Zealand.  Jane is a qualified scarfie, attending Otago University and graduating with a Bachelor of Commerce in Economics with 1st class honours.  In 2014, she took a career break from ASB to travel the world and learn to snowboard.

Mark Smith

Senior Economist

Mark joined ASB in 2017, with over 20 years of public and private sector experience working as an economist in New Zealand and the UK.

His resume includes lengthy stints at ANZ and the Reserve Bank of New Zealand, and he has also worked at the Bank of England, HM Treasury and the New Zealand Transport Agency. Mark's areas of specialisation include interest rate strategy, macro-economic analysis and urban economics.

Born and bred in the Waikato, Mark studied at Waikato University where he graduated with a Master of Social Sciences, majoring in Economics.

Mark's key strengths are the ability to use his extensive experience, inquisitive nature, analytical ability, creativity and pragmatism to dig a little deeper and to deliver common sense solutions to tackle complex problems.

When not at work Mark likes to travel, keep fit and spend time with his friends and family.

Mike Jones

Senior Economist

Mike joined ASB in 2019 armed with almost 15 years of experience in applied macroeconomic and financial markets analysis.

Mike's career has been all about distilling the risks and opportunities of economic and financial market trends for business. Basically asking the "what does it all mean" question. Mike's enthusiasm and skill for drawing out practical, commercial insights from the murky world of economics has been honed over a relatively broad base of experience.

After spending the early part of his career on the tools at the Reserve Banks of both NZ and Australia, Mike had a lengthy stint at BNZ where he was NZ’s top-ranked currency strategist. His regular and topical macro research also saw him pick up several FX forecast accuracy gongs from Bloomberg.

Drawn in by the prospect of putting strategy into practice, Mike moved from Wellington to Auckland in 2013 to join Fonterra as GM Treasury Risk Management. In this role, Mike lead Fonterra’s macroeconomic research output, and was responsible for the strategy and execution of Fonterra’s foreign exchange, debt, and interest rate hedging programmes.

mike.jones@asb.co.nz