Two key developments this week-end as we wait on Asian markets 3 Dec
In the past 48 hours we've seen an advance on Trump's tax reforms (in theory USD positive) and more news on Flynn's testimony re Russia/election positioning and Trump's response (USD negative).
All this happening since US markets closed on Friday so we need to be aware as Asian markets start us off for another week of fun and games in the ever-fickle world of forex. As I have often said on these pages I have no political bias to offer here so let's just try and examine how markets will be affected.
Flynn has entered a plea deal and agreed to co-operate with an inquiry into alleged collusion with Russia.The deal, for a lesser charge than he might have faced, prompted speculation that he has incriminating evidence.
Yesterday Trump tweeted:
He then later spoke to reporters saying:
"What has been shown is no collusion, no collusion. There has been absolutely no collusion. So we're very happy."
The above tweet seems to suggest that Trump admitted he knew Flynn had lied to the FBI before he fired him in February - contradicting Trump's account at the time. It has now been revealed that it the tweet was drafted by Trump's lawyer and the White House has yet to comment.
Trump has just tweeted this:
Whatever the truths of that Flynn could still face jail and, more importantly, could be sharing damaging information about the Trump inner circle that he inhabited for so long. Not to ignore either the rumours surrounding Rex Tillerson's future.
Update 11.55 GMT: Adding to the drama ABC news have now suspended news presenter Brian Ross over inaccuracies in his original Flynn report.
All this happening on the back of Trump's tax reform bill edging it's way through the Senate in the early hours of Saturday morning by 51 votes to 49. Adam had the first inklings here and while the markets have previously been supportive of this there is still some way to go in theory to get it all through.
The final draft of the bill went through several changes in order to bring reluctant Republicans on board. Republicans have a 52-48 majority in the Senate and now the Senate will have to merge its legislation with that passed last month by the House of Representatives, before it can be signed into law by the president.
So, interesting times ahead tonight and this week. The tax reform bill will be perceived as a welcome boost to the US economy but the potential political fall-out from the Flynn proceedings could, imho, far outweigh any bullish USD sentiment.
What do you all think out there ?
Trump and Flynn - Tough times ahead