90 seconds at 9 am: Polling right

US new home sales rise; EU votes 'right'; Ukraine votes for chocolate; Putin conciliatory; UST 10y 2.54%; NZ$1 = US$0.854, TWI = 79.8

26th May 14, 7:33am by David Chaston

Here's my summary of the key news over the weekend in 90 seconds at 9 am, including news of polls and voting.

But first, the American's are buying more new houses. In April they bought them at the annual rate of 433,000, up 6.4% from the March rate of 407,000 but that is lower than the 452,000 rate they bought them at in April 2013 (although that was an unusually high point). More than half of them are being sold in the South.

There have been a number of polls and voting over the weekend.

In Europe, voting for the EU parliament is underway and early polls suggest anti-EU parties are doing well. Investors are watching the results of these elections as they could deal a blow to political parties that are key to reform efforts in the European Union.

It does seem that in Germany, the Merkel government has withstood the anti-EU challenge. Results will start coming in after 9am this morning and there may be 'interesting' results, especially in France and Britain.

In the Ukraine, a chocolate tycoon seems certain to lead the troubled country. And Russia has set a much more conciliatory tone over the weekend with Vladimir Putin acknowledging that sanctions are having a 'real impact' on his country.

There were opinion polls out over the weekend in New Zealand and somewhat surprisingly, they all pointed to similar trends.

At the end of trading in New York last week, gold was down and oil was up. UST 10yr bond yields finished at 2.54%. The US is now on its Memorial Day long weekend holiday, the start of summer and their traditional driving season. We will be hearing more of the usual 'gasoline price rise' stories until about August.

On the exchange rate, we start the week with the NZ dollar marginally lower at 85.4 USc, at 92.7 AUc and the TWI is now at 79.8.

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

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

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7 Comments

by dh | 26th May 14, 9:11am 1401052290

There is a pretty large (and consistant between polls) difference in National's support between Roy Morgan and the polls from this weekend. Now, they do use different polling strategies (Roy Morgan ring cellphones), so on election day someone is going to get bragging rights because the difference is so big.

by Andrewj | 26th May 14, 9:36am 1401053784

Algos Get Jiggy Over “In-Coming” Data Noise: April New Home Sales Up 2K From March! (Shhh, But Down 5% Y/Y)

http://davidstockmanscontracorner.com/algos-get-jiggy-over-in-coming-da…

by Andrewj | 26th May 14, 9:40am 1401054020

http://www.oftwominds.com/blogmay14/charts-narrative5-14.html

by steven | 26th May 14, 9:58am 1401055095

Agree. If the powers that be had sorted the financial mess in 2008 and I mean really sorted it, we may have got somewhere, they didnt however, they just can kicked and let it get bigger. The tight oil industry is set to implode really soon by the look of it...I wonder if that will be the trigger than turns the stock market.

regards

by King of the whiners | 26th May 14, 9:47am 1401054453

http://resourceinsights.blogspot.co.nz/2014/05/the-great-imaginary-cali…

''The pending 96 percent reduction in estimated deep shale oil resources in California revealed last week in the Los Angeles Times calls into question the oil industry's premise of a decades-long revival in U.S. oil production and the already implausible predictions of American energy independence. The reduction also appears to bolster the view of long-time skeptics that the U.S. shale oil boom--now centered in North Dakota and Texas--will likely be short-lived, petering out by the end of this decade.''

'''It's no surprise that those who work in the oil industry are perennially optimistic. This high-risk business isn't for the timid. And that optimism is necessary if the industry is going to raise the capital it needs from investors. But it should be obvious that relying on the oil industry for objective information that will form the basis for public policy is a mistake. Independent sources and objective data are important cross-checks on the industry's understandable but often misleading enthusiasm.'''

There are lessons to be learned here in the way in which the media (this site included) report the oil/energy industry. But will they be heeded? I doubt it - misinformation and disinformation will remain the order of the day.

by steven | 26th May 14, 10:05am 1401055513

and this looks to be the first. The so called productive tight plays that soo many crow about are only really productive in a small area of them. Then there are the other plays that are booked as extractable...now with a 96% downgrade on this one they are probably worthless.

The Q is now with this report how bright a spot light will be put on these and other plays. If a competant look is run over them I think there will be more shock and horror and massive downgrades. After that who's bought these plays? well the bigger players and they look to be left with worthless or worth substantially less assets, that will do their shares the world of good, not.

regards

by Kiwi | 26th May 14, 10:47am 1401058036

Explosive claims on JP Morgan conduct

A technical support person who worked for JP Morgan in Australia claims the bank regularly misled its New York parent and the US Federal Reserve by failing to report losing trades.

...

Trades not booked into systems and only being tracked by paper-based legal agreements, which would be ''torn up'' if required, thereby leaving no trace.

http://www.smh.com.au/business/explosive-claims-on-jp-morgan-conduct-20140525-38wq6.html

I find it amazing that a company could do this and not be discovered by someone on the losing side of the trade. Maybe both sides were corrupt and in on the deal.