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Americas Roundup: U.S. dollar slips on report of Flynn testimony, Gold inches up, Wall St ends modestly lower, Oil settles up but off highs as Flynn news spooks financial markets-December 2nd 2017


Market Roundup

• Flynn pleads guilty on Russia, reportedly ready to testify against Trump.

• U.S. Senate Republicans pin down votes to pass tax bill -McConnell.

• US Nov Markit Mfg PMI Final, 53.9, 53.8 previous.

• US Nov ISM Manufacturing PMI, 58.2, 58.4  forecast, 58.7 previous.

• US Nov ISM Mfg Prices Paid, 65.5, 67.0 forecast, 68.5 previous.

• US Nov ISM Manuf Employment Idx, 59.7, 60.0 forecast, 59.8 previous.

• US Nov ISM Manuf New Orders Idx, 64.0, 63.4 previous.

• US Oct Construction Spending MM, 1.4%, 0.5% forecast, 0.3% previous.

• U.S. regulator to allow CME, CBOE to list bitcoin futures.

• Fed should raise interest rates in near future, Kaplan says.

• Fed's Bullard: "Material risk" of yield curve inversion late next year.

• Fed's goals include 'economic opportunity' for all -Harker.

• Canada Q3 GDP QQ, 0.4%, 1.1% prev, 1.0% revised.

• Canada Q3 GDP QQ Annualized, 1.7%, 1.6% forecast, 4.5% prev 4.3% revised.

• Canada Sep GDP MM, 0.2%, 0.1% forecast, -0.1% previous.

• Canada Nov Markit Mfg PMI SA, 54.4, 54.3 previous.

• Canada Nov Employment Change, 79.5k, 10.0k forecast, 35.3k previous.

• Canada Nov Unemployment Rate, 5.9%, 6.2% forecast, 6.3% previous.

Looking Ahead - Economic Data (GMT)

• 4 Dec 00:30 Australia Q3 Business Inventories, 0.1% forecast, -0.4% previous

• 4 Dec 00:30 Australia Q3 Gross Company Profits, 0.2% forecast, -4.5% previous

Looking Ahead - Events, Other Releases (GMT)

• 2 Dec 00:00 Fed's Randal Quarles speaks in New York

• 4 Dec 04:00 BOJ's Kuroda and ECB's Villeroy speaks in Tokyo

Currency Summaries

EUR/USD is likely to find support at 1.1808 levels and currently trading at 1.1893 levels. The pair has made session high at 1.1934 and hit lows at 1.1847 levels. Euro edged higher against the dollar on Friday after ABC News reported that Michael Flynn, a former adviser to U.S. President Donald Trump, said he was prepared to testify that Trump directed him to make contact with the Russians when he was a presidential candidate. The dollar index, which measures the greenback against six rival currencies, was up 0.15 percent at 92.903.Growing optimism that U.S. Senate Republicans would be able to pass a tax overhaul bill had sent the index as high as 93.248, but the index reversed course sharply on the Flynn headlines. Meanwhile, U.S. Senate Republicans said they had gathered the votes needed to pass a sweeping tax overhaul, after last-minute negotiations to ease some senators' concerns about the bill's impact on the federal deficit, healthcare and property taxes. The dollar has grown very sensitive to the prospect of the passage of the tax bill in recent weeks and any perceived hurdles have been a source of anxiety for dollar bulls. The euro remained slightly stronger against the dollar, after data that showed global manufacturing expanded at the fastest pace in years last month and the second-fastest for two decades in the eurozone, driven by robust demand.

GBP/USD is supported in the range of 1.3430 levels and currently trading at 1.3473 levels. It reached session high at 1.3522 and dropped to session low at 1.3441 levels. Sterling dipped from two months high against the dollar on Friday as some investors were concerned that optimism around Britain getting a deal with the EU which, this week lifted the pound to six-month highs, might have gone a little too far. The pound had jumped on Thursday on reports that Britain and the European Union had reached agreement on a divorce bill and were close to a deal on the border between the Irish Republic and Northern Ireland, which is part of the UK. But although Ireland said on Friday a breakthrough on the future of the Irish border after Brexit remained "doable" before a key EU summit in two weeks' time, the negotiating teams are "not there yet", the Irish foreign minister said. Traders are eyeing a meeting between May, EU chief executive Jean-Claude Juncker and his chief Brexit negotiator Michel Barnier on Monday, which will mark the "absolute deadline" for London to deliver "sufficient progress" in its divorce offer as set by European Council President Donald Tusk. After reaching as high as $1.3550 in early trading in Asia, its strongest since Sept. 25, sterling slipped to $1.3500 by 1715 GMT, down 0.2 percent on the day, though still up more than 1 percent on the week.

USD/CAD is supported at 1.2663 levels and is trading at 1.2691 levels. It has made session high at 1.2890 and lows at 1.2688 levels. The Canadian dollar strengthened against its U.S. counterpart on Friday as upbeat jobs data boosted expectations for further Bank of Canada interest rate hikes early next year. Canadian employment rose 79,500 in November, adding to robust gains in 2017. The November increase was much stronger than the 10,000 jobs gain that economists had expected, while wage growth accelerated to 2.7 percent year-on-year from 2.4 percent. Investors expect the Bank of Canada to leave its benchmark interest rate steady at 1 percent at next week's policy decision. But chances of a hike in January rose to nearly 60 percent from less than 50 percent before the data, the overnight index swaps market indicated. The central bank raised rates in July and September for the first time in seven years but has since turned more cautious on the outlook for the economy. Separate data showed that Canadian economic growth slowed to 1.7 percent in the third quarter, coming off a hot first half of the year. For September, the economy grew 0.2 percent, topping expectations and suggesting modest momentum heading into the fourth quarter. The Canadian dollar was last trading at C$1.2693 to the greenback, up 1.1 percent, its strongest gain since Sept. 6.The currency touched its strongest since Monday at C$1.2742.

USD/JPY is supported around 111.00 levels and currently trading at 112.16 levels. It peaked to hit session high at 112.85 and made session lows at 111.38 levels. The U.S. dollar declined sharply against the Japanese yen on Friday demand for safe-haven Japanese yen increased after an ABC report said former national security adviser Michael Flynn was prepared to testify that Donald Trump instructed him to make contact with Russians during the presidential campaign. The sharp moves partially reversed after U.S. Senate Republicans said they had enough support to pass a tax overhaul bill later in the day. ABC News cited a confidant as saying Flynn was ready to testify that Trump directed him to make contact with Russians before he became president, initially as a way to work together to fight the Islamic State group in Syria. This developed as Flynn on Friday pleaded guilty to lying to the Federal Bureau of Investigation about contacts with Russia's ambassador, and prosecutors said he consulted with a senior official in Donald Trump's presidential transition team before speaking to the envoy. The dollar index fell 0.15 percent. The Japanese yen strengthened 0.40 percent versus the greenback at 112.10 per dollar.

Equities Recap

European stocks, which were recovering from early losses and set to finish the first trading day of December in positive territory, fell suddenly after ex-U.S. national security adviser Michael Flynn pleaded guilty to lying to the FBI.

UK's benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day down by 0.65 percent, Germany's Dax ended down by 1.2 percent, France’s CAC finished the day down by 1.1 percent.

Wall Street fell on Friday, whipsawed by developments with a probe into Russia's alleged involvement in the U.S. election as well as with progress on a tax bill in Congress.

Dow Jones closed down by 0. 18 percent, S&P 500 ended up 0. 0.22 percent, Nasdaq finished the day down by 0.40 percent.

Treasuries Recap 

U.S. Treasury yields plunged on Friday after ABC News reported that Michael Flynn, a former adviser to U.S. President Donald Trump, said he was prepared to testify that Trump directed him to make contact with the Russians when he was a presidential candidate.

The benchmark 10-year Treasury yield dropped to a low of 2.315 percent after the news, from 2.415 percent late on Thursday. It was last at 2.365 percent.

U.S. 30-year bond yields plunged to 2.716 percent, the lowest since Sept. 11, from Thursday's 2.831 percent. In late afternoon trading, the 30-year yield was 2.757 percent.

Commodities Recap

Gold jumped on Friday as the dollar and U.S. stocks fell on an ABC news report that former national security adviser Michael Flynn was prepared to tell investigators that Donald Trump directed him to make contact with Russians during last year's presidential election campaign.

Spot gold was up 0.3 percent at $1,278.01 an ounce by 1:39 p.m. EST (1839 GMT), after peaking to $1,289.50. The yellow metal was poised to end the week 0.8 percent lower.

U.S. gold futures for February delivery settled up $5.60, or 0.4 percent, at $1,282.3 per ounce.

Oil prices settled up slightly on Friday, but came off session highs as financial markets reeled from an ABC News report that added to concerns about President Donald Trump's exposure to a probe into Russian meddling in last year's campaign.

Brent futures settled at $63.73 a barrel, putting the new front-month February contract up 16 cents from where January expired on Thursday. The February futures contract was up about 1.8 percent from where it closed in the previous session.

U.S. West Texas Intermediate crude gained 96 cents, or 1.7 percent, to settle at $58.36 per barrel. WTI's January contract CLF8 does not expire until Dec. 19
 

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December 15 21:00 UTC Released

USOverall Net Capital Flows

Actual

151.2 Bln USD

Forecast

Previous

-51.3 Bln USD

December 15 21:00 UTC Released

USNet L-T Flows,Incl.Swaps

Actual

7.9 Bln USD

Forecast

Previous

65.1 Bln USD

January 9 11:00 UTC 3374233742m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3374233742m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3374233742m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3374233742m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3374233742m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3374233742m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

December 12 09:30 UTC 66696669m

GBRPIX YY

Actual

Forecast

Previous

4.2 %

December 12 09:30 UTC 66696669m

GBPPI Input Prices MM NSA

Actual

Forecast

Previous

1 %

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