iPredict Weekly Update 21 July 2011

The latest update from iPredict update is out.

Commentary:

There is an expectation that the OCR will increase earlier than previously indicated after the release of inflation data this week, according to the latest snapshot from New Zealand’s prediction market, iPredict. Consequently, there is an increased likelihood that mortgage rates will reach at least 6.00% before the end of the year. Unemployment is expected to continue to improve from the current rate of 6.6% and GDP growth forecasts have also improved marginally. In politics, New Zealand First has again reached MMP’s 5% threshold, although its hold on this is tenuous, with the market indicating only a 22% probability that Winston Peters will return to Parliament. Taking into account New Zealand First’s current share of the party vote, John Key is still strongly favoured to remain Prime Minister, and would be able to govern with the support of the Act Party and one of the UnitedFuture or Maori parties.