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Trump closer to being President; Fed talks up rate rise "fairly soon"; first global code of conduct for FX calls for info sharing; US pending home sales hit 10-yr high; UST 10yr yield 1.84%; oil tips over US$50, gold higher; NZ$1 = 67.5 US¢, TWI-5 = 71.5

Trump closer to being President; Fed talks up rate rise "fairly soon"; first global code of conduct for FX calls for info sharing; US pending home sales hit 10-yr high; UST 10yr yield 1.84%; oil tips over US$50, gold higher; NZ$1 = 67.5 US¢, TWI-5 = 71.5

Here's my summary of the key events overnight that affect New Zealand, with news unofficial counts by the media indicate Donald Trump has enough delegates to clinch the Republican nomination for the US presidential election. 

While Trump has had the nomination locked down for weeks, he's now received enough support by getting fence-sitting delegates on his side. He won't formally accept the party's nomination until delegates vote in July. The news comes after President Barack Obama said foreign leaders were "rattled" by Trump for good reason. 

Staying in the US, the Fed is continuing to lay the groundwork for a rate rise in the next two months. Fed Governor Jerome Powell has said the economy will probably be ready for a hike "fairly soon", as it's on "solid footing". Yet he adds the uncertainty surrounding Britain's June 23 referendum on whether to leave the EU will be an argument in favour of the Fed exercising "caution". All eyes will be on a speech Janet Yellen will deliver tomorrow. 

The first global code of conduct for currency trading has been published in an attempt to regain trust in an industry plagued by scandals. The code, put together by central banks and market representatives, calls for more information sharing. It says banks need to be more open to giving central banks information for policy purposes. It also sets out how dealers should deal with rumours that might move prices. The code is only voluntary.

Pending home sales in the US reached their highest level in over a decade in April, according to the National Association of Realtors. The Pending Home Sales Index, a forward-looking indicator based on contract signings, jumped 5.1% last month, putting it 4.6% above April 2015. The Association's chief economist says, "The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market."

In New York the benchmark UST 10yr yield has fallen again today to 1.84%. 

The US oil price has tipped over US$50/barrel in the last 24 hours, for the first time since November. The US crude and Brent benchmarks have since eased back to around US$49.50/barrel. 

The price of gold has jumped to US$1,231/oz.

The NZ dollar has weakened slightly since this time yesterday to 67.5 US¢. Data indicating softer capital goods orders in the US has seen the USD ease, yet soaring pending home sales and talk of a rates rise has buoyed the USD again. The NZD hasn't recovered against the Aussie, after Fonterra's opening milk price announcement yesterday. It's at 93.5 AU¢ and 60.3 euro cents. The TWI-5 index has eased back to 71.5.

If you want to catch up with all the local changes yesterday, we have an update here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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20 Comments

Free market reacts to brand Trump...and might be more effective than any street protest.
http://usuncut.com/politics/trump-campaign-hurting-hotel-business/
or will it just make him angry??

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Short the entire sharemarket save arms industry if you think he'll get in.

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Re Trump. Heaven help us There is a real possibility that he could win the Presidency. The sort of stuff that is starting to emerge re the Clintons (dodgy charity dealings, her emails, her past decisions and of course Bills philandering) Trump has plenty of ammunition and a significant proportion of the American public are feeling disenfranchised and sufficiently distrustful of the establishment to vote him in. His momentum is upwards, hers not so much. Bernie Sanders may have been a better alternative as the polls show.

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i never thought this would happen, especially after Xmas when i was talking with american republicans who were horrified he even got this far, BUT i think he could win

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Allegedly...

  • He is not a "professional politician"
  • He can't be bought
  • He is not in bed with the Banks
  • He is not in bed with Wall Street
  • He certainly will not pander to the "do gooders"...
  • He calls a spade a spade
  • etc.

Certainly Appealing to a LOT of people....

The alternative; status quo!

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He will be a great President.

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If he destroys the Republican party as we know it, for good.

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A lot of people were just as worried about George Bush, and lets face it, he hardly had a stellar foreign record.

I remember when I was backpacking in 2004 I met an American guy and we got talking about politics. He said one thing about Bush that has stuck with me.

In essence he said that the rest of the world can hate them as much as they want but "Bush will look after Americans first". That is really what Trump is campaigning on. He will place American interests above all else.

We may not like it but what more do you want in a leader?

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Wasn't that the appeal of Adolf as well?

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Hey, they voted in the village idiot so why not the court jester as well?

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Voters all over the world are sick of the Status Quo.
Clinton has been involved with politics for over 25 years and not achieved much.
The NAFTA agreement she supported killed off many U.S. factories with them all disappearing south of the border.
She handed over 30000 plus emails after deleting 30000 plus emails that she and her staff considered personal.
She is a crook along with her hubby Slick Willie.

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That is why Obama has not come out clearly with any ringing endorsement of Hillary yet.

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All eyes will be on a speech Janet Yellen will deliver tomorrow.

Hmmmm.

The numbers are simply staggering, though not unexpected given the preview provided in the benchmark revisions of Industrial Production for consumer goods. As you can plainly see above, there is so little left of 2014’s “bump” that it doesn’t qualify for anything other than confirmation that the 2012 slowdown was indeed a permanent alteration in trajectory; a black hole of economic gravity from which there never was any possible escape. There is nothing of Yellen’s economy left in it. Read more

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In a world where Trump can get in anything is possible. If this is the world where he wins it's quite possible Auckland's house prices will go up forever. Alas we'll probably all be annihilated by the nuclear bomb fallout... Time to build a bunker. Maybe those doomsday Preppers are onto something.

The guy is a giant risk to national (USA) and global peace and unity. It's madness he has gotten this far.

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Why don't you say the same thing about Hillary? She is the one threatening to start a war with Russia in a bid to protect the moderate terrorists in Syria. Trump is on record as having a peaceful attitude toward Russia.

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You would think with 350,000,000 to choose from they could find some better candidates than Cruz, Rubio, Trump, Clinton, Palin etc etc
Could not believe it when they elected George W, TWICE!!(with a little help from the Florida vote rigging); with a little help from Clinton Trump will romp in.
That lot make our MPs look good.

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There's the rub, they cant because those put forward by the powermongers are all so very alike and plainly beholden to the money. Trump is an independent in convenient republican clothing, he is in fact the tick box that should be on all ballots,"None of the above".
Finally, they all sigh, an outsider, one capable of saying no to the lobbyists and to suffer no denial of resources. Incapable of being silenced and with every loudmouth shill and hacks attempt to shout him down he will rise and show the finger to their tirade.
He may not be the best leader a nation ever produced, but he is unlikely to show up in history as the worst.

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I'll eat my Spinach!, you mean Winston Peters of course??

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In Trump we Trust!!

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Go Gary Johnson!

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