Equity losses grow as repricing shift deepens

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the move towards bear market conditions seems relentless, even if Wall Street pulled back slightly on Friday.</p><p>But first, the Australian election seems to have not only delivered a change of governing party - the traditional switch between the Coalition LNP and the Australian Labor Party - but voters behaved in an unusual way, cutting their support for both. The LNP suffered a huge loss of support, but the ALP also suffered a loss, even if quite small.</p><p>The gainers were the blue/green independents (the 'teals'), and to a much lesser extent the red/green Greens (the 'purples'). Teal independents have won seven more seats so far, as many extra as the ALP. The Greens won two more. Some seats are still to be decided. The swing to the ALP was less than +4%, the swing away from the LNP was almost -6%. Almost all the difference was the 'teal' independents. They were motivated by climate-change and anti-corruption policies.</p><p>In hindsight, it seems clear that the LNP was perceived as driving fringe agendas and culture-war policies out of step with a modern mainstream society, and it was tainted with indications it was untrustworthy. Poor pandemic policies and denials didn't seem to help. Those attributes were punished by voters.</p><p>The changes to their Senate are still quite unclear, and the results there are delivered by a very opaque system that can see minor forces (like the Greens) elevated.</p><p>The implications for New Zealand are still murky, but they are probably better than if the LNP had retained power.</p><p>In other news, the Chinese central bank held steady its key rates for corporate and household loans at its May fixing, but <a href="http://www.pbc.gov.cn/zhengcehuobisi/125207/125213/125440/3876551/4559923/index.html" target="_blank"><strong>cut t