Investing.com – Take a peek at the top 5 things that rocked U.S. markets this week.
Flynn, Senate Tax Bill Rocked US Markets
Investors had to contend with a wild ride in US stock markets this week as signs of progress on tax reform were offset by reports suggesting that Michael Flynn was prepared to testify against President Donald Trump as part of the investigation into Russian involvement in the election.
Flynn is prepared to testify that President Donald Trump directed him to make contact with Russians when he was a presidential candidate, ABC News reported.
The dow jones fell as much as 350 points on Friday but recovered to close roughly 40 points lower as focused shifted to tax reform after Senator Mitch McConnel said Republicans had the 50 votes they need to pass the tax bill.
Bitcoin Hit $11,000
Wild swings in Bitcoin continued as the popular digital currency soared to $11,427.2 for the first time in its nine-year history on Wednesday before profit taking set it, forcing the digital currency to fall below $9,000.
The drop in bitcoin was short-lived, however, as it recovered amid growing expectations that Chicago Mercantile Exchange and the CBOE Futures Exchange will be the first traditional exchanges to enter the cryptocurrency market.
"We are pleased to bring Bitcoin futures to market”, Terry Duffy, CME Group Chairman and Chief Executive Officer on Friday. Bitcoin futures will be available to trade on Dec. 18.
Sterling Soared to 2-Month Highs
Sterling rose to two-month highs as sentiment on brexit turned positive following reports this week suggesting British and EU negotiators have reached a deal over the so-called Brexit divorce bill.
If a settlement on the Brexit divorce bill is agreed, it paves the way for UK-EU discussions on an interim trade deal, easing the risk of “hard Brexit” – the UK exiting the EU without a trade deal.
GBP/USD came under pressure on Friday but remained close to two-month highs.
OPEC, Russia Extended Oil Cuts Through 2018
OPEC and some non-OPEC producers who met on Thursday in Vienna, Austria, said they would continue to cut supply by 1.8 million barrels per day (bpd) until the end of 2018, raising expectations for a continued drawdown of inventories as rebalancing in markets gets underway.
The announcement of a nine-month extension had a muted impact on oil prices as the extension was said to be mostly priced in, but reports that both Nigeria and Libya decided to cap production added a positive slant on the outcome of the meeting.
Crude futures for January delivery rose 1.7% to settle at $58.36 a barrel.
Gold Prices Slipped to Second-Straight Weekly Loss
A rally in gold prices on Friday on reports suggesting Michael Flynn was “prepared to testify” against President Donald Trump as part of an investigation into Russia’s involved in the presidential election failed to offset losses earlier in the week.
The losses in gold earlier this week came amid signs that US inflation is starting to gather pace lifted the dollar higher, reducing demand for the precious metal.
The core price consumer expenditure (PCE) index – the Fed’s preferred measure of inflation – rose 1.4% in October year-on-year, compared to a 1.3% rise in the previous month, while September inflation was revised upward to 1.4% from 1.3%.
The upbeat inflation report, fuelled expectations that the Federal Reserve would adopt a more aggressive stance on monetary policy, lifting yields and the dollar to session highs, which pressured gold prices to a nearly two-week low.
“We now see four rate hikes next year instead of three, followed by three hikes in 2019 instead of four,” said Deutsche Bank.