* Dollar finds support after dip, bonds get respite from
* Asia shares mostly flat after modest Wall St pullback
* Euro, bank stocks uneasy over Italian political risk
* Oil volatile, industrial metals in demand
By Wayne Cole
SYDNEY, Nov 29 (Reuters) - The U.S. dollar took a breather
on Tuesday as global bonds steadied from their recent rout,
while equities flatlined as political risk resurfaced in Europe
ahead of a referendum in Italy this weekend.
Oil prices remained jittery in the countdown to Wednesday's
OPEC meeting but industrial commodities continued to benefit
mightily from Chinese demand, both real and speculative.
The action in Asian stocks was guarded with Australia up 0.1
percent and Japan's Nikkei off 0.2 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan
barely budged after two days of gains.
The cautious mood was set by Wall Street which suffered its
worst performance in nearly a month as some investors booked
profits in the financial and consumer discretionary sectors.
The Dow had ended Monday down 0.28 percent, while the
S&P 500 lost 0.53 percent and the Nasdaq 0.56
percent. The pan-European FTSEurofirst 300 index fell
0.85 percent, led by a near-4 percent drop in Italian banks.
Worries about Italy's banking system are building ahead of a
Dec. 4 referendum on constitutional reform, which could decide
the political future of Prime Minister Matteo Renzi.
"Citi's base case is for a NO vote to prevail with political
uncertainties likely to remain elevated over the near-term,"
wrote analysts at Citi.
"It's worth watching whether PM Renzi resigns in the event
of a No vote as promised, before rushing into euro shorts."
RED HOT METAL
The political risk kept the euro restrained despite the
pullback in the dollar. The common currency was pinned at
$1.0606, after failing to hold an 11-day high of $1.0686.
Citi sees major chart support at $1.0458-1.0523, a region
also capturing the post-U.S. election low of $1.0518.
The dollar was again moving higher on the yen to reach
112.18, after profit-taking pulled it down as far as
111.58. It remains 7 percent higher for the month.
Dealers reported Japanese buying for the new month with
orders today settling on Dec. 1. Against a basket of currencies,
the dollar held at 101.270 and not far from last week's
The greenback was still on track for its strongest two-month
gain since early 2015, underpinned by expectations the Federal
Reserve is almost certain to hike interest rates next month.
Yields on two-year Treasury paper have already
hit their highest since early 2010 in anticipation, greatly
fattening its premium over European and Japanese debt.
In commodity markets, investors anxiously awaited an OPEC
meeting on Wednesday with none any wiser on whether producers
will agree to lasting output cuts.
U.S. crude was last off 25 cents at $46.83 a barrel,
after seesawing wildly on Monday. Brent eased 28 cents
to $47.96. Traders fear a major selloff should OPEC fail to
reach a deal after so much wrangling.
Industrial metals extended their blistering rally,
generating a welcome inflationary pulse in the global economy.
Iron ore futures traded in China surged to their highest
since early 2014, while zinc touched a nine-year peak
and lead a five-year top.
Closures of steel plants in China have tightened supply
while Beijing has approved a string of massive infrastructure
projects, including a $36 billion railway plan just this week.
(Reporting by Wayne Cole; Editing by Eric Meijer)