Here's our summary of key events from over the weekend that affect New Zealand.
The prudent, steady-as-she-goes Budget hasn't shifted the dial for the Coalition Government. According to the latest Newshub-Reid Research poll, support for Labour is up 0.3% to 42.6% and National 0.6% to 45.1%. Meanwhile the Greens and NZ First are down, with NZ First well below the 5% threshold at only 2.4%. According to the poll, National still doesn't have enough mates to govern.
What's more, Simon Bridges is completely dwarfed by Jacinda Ardern in the preferred prime minister stakes. Taking out only 9% of the vote, versus Ardern's 40.2%, this is the lowest result for a National leader in over a decade. Winston Peters is set to take the helm with support of only 4.6% of those polled.
A characteristic flip-flop from Donald Trump over the weekend - this time involving North Korea. After last week cancelling his meeting with the North Korean leader, the US President says talks might eventuate on June 12 after all. Meanwhile US and North Korean officials are pushing on with their disucssions.
The North and South Korean leaders also had a surprise meeting over the weekend, with the North Korean leader squeezing in time for selfies in Singapore, where his meeting with Trump is supposed to take place.
US headline durable goods orders in April have come in weaker than expected, down 1.7% month-on-month, owing largely to weak aircraft orders. Excluding transportation, orders were up 0.9%.
Consumer confidence in the US is continuing to slip off the 14-year high seen earlier in the year. According to the University of Michigan's Survey of Consumers' chief economist, consumers anticipated smaller income gains in May than a month or year ago, even though they expected the unemployment rate to stabilise at its current 18-year low. Importantly, references to discounted prices for durables, vehicles, and homes fell to decade lows.
Meanwhile the unexpectedly negative German business sentiment we first saw in April has continued into May, although at a similar level.
The UK’s second first quarter GDP reading is unchanged at 0.1% quarter-on-quarter. Household spending rose 0.2% - the weakest reading in three years. Business investment fell 0.2% and construction 2.7%. Looking forward, ANZ economists say markets and policymakers will be looking to the second quarter for confirmation that first quarter weakness was caused by the weather.
The UST 10yr yield has fallen another 5bps over the weekend to 2.93%.
Oil has tumbled a few dollars on talk of increased output from OPEC. The US crude price is down to US$68/bbl, while the Brent benchmark has fallen to US$76/bbl.
Gold has jumped US$14 to US$1,289/oz.
The NZD has strengthened marginally across the board since this time on Friday. It's at 69.3 USc, 91.6 AUc and 59.4 euro cents. The TWI-5 is at 72.2.
Bitcoin is down 4% to US$7,600.
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31 Comments
I don't think it was a flip-flop by Trump but rather a very calculated move. He is signalling to Kim that he is not prepared to accept any deal for the sake of getting a deal as Obama did regarding Iran. Trump has indicated that the only deal on the table involves complete, irreversible, and verifiable denuclearisation of North Korea. Kim has very options left.
I think it is the equivalent of the collapse of the Berlin Wall thirty years ago. Look at the body language, Kim Jong Un is enjoying himself when he meets with the South Korean guy. He has to look tough for his supporters, but he clearly has a firm grip on power, having purged those who would control him. Kim Jong Un could well be the best leader on the planet if he can pull off a deal to bring North and South Korea together.
Different times but the problem with this one as well, are the neighbours, China and to a slightly lesser degree, Russia. How can NK maintain the social isolation it is dependent on if it’s people start getting a real taste of western culture & delights ad available across the border in SK. The “reds” want to keep NK red. They want the USA out of the region not gaining any more influence. NK regime is obviously under huge pressure economically now & suspect they will say as much as they can to get the sanctions relaxed and then do as little as they can get away with. Really the SK & NK have a sort of balance of power in terms of conventional warfare and if NK start anything, China will not back them this time. It would seem that all NK might need is a treaty with SK and attested by the UN (USA) that NK’s sovereignty is guaranteed.
Yes, timing is everything. "Giuliani also said that the former administration should have informed Trump that it was looking at Russia meddling during the 2016 race and was surveilling his campaign.
“Some of it is Mueller’s fault (but) it completely taints his investigation,” Giuliani said. “The whole thing with this investigation that was going on, which we consider spying, was done before Mueller got involved. But it completely taints his investigation.”"
I'm finding this new talking point angle Trump is using vis-a-vis Russia quite fascinating, I have to admit. That it was all a conspiracy to spy on him.
I mean, I hold no regard for Hillary and thought both parties fielded basically the worst set of candidates in recent history, but this new campaign on the Russian issue is just, yeah, fascinating.
I read more than one article before writing my item on the US/North Korea issue. It is a "characteristic flip-flop", as Trump has on a number of occasions drastically changed his position on a matter. I haven't seen evidence that Trump planned to say no to a meeting with Kim Jong Un, knowing that he was later going to say yes. Reporting that this was part of some sort of tactical plan would be making an assumption. I can't make assumptions and report them as fact. You, however, can make assumptions and voice them as opinion in a comment thread.
I think “flip flop” is actually a bit too praiseworthy. Trump appears to thrive on chaos and might even just create it as the need arises. Looking at his personal and commercial life , seems to have been that way since he first learn’t to talk. It’s his way of doing things and for him it works, and if it doesn’t work for anybody else, too bad. In the old days it used to be called, divide and rule. Keep everybody busy fighting each other etc etc. Had a boss like that once. He would take a mighty wild swing at all and sundry and then on about the ninth occasion, there would be an absolutely mind blowing brilliant result, that nobody else could ever have imagined. Hard to work with though!
It's more than likely that in Trump, we have ourselves another Continental Op. Sometimes, as Spengler/Goldman notes, a stirrer in the Clint Eastwood mould.
Order is not always an attainable condition, and when it is not, disorder is a thing that is better to give than to receive.
In different ways, the Chinese and Russians understand this. The Chinese have been handling unruly barbarians on their border for thousands of years, and have no illusions about the survivability of backward cultures. Russia knows how to exploit disorder and force the burden of uncertainty onto its opponents (which explains why Russia has been far more effective in Ukraine than the United States).
Where is order attainable, and whose order is it? What are the economic, demographic and strategic boundary conditions for such order? And when is managed disorder as good as it gets?
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