United States

Submitted by Howard Kunstler via Kunstler.com,

As BofA's rates strategist Ralf Preusser writes in a note this morning, "not even a month since the US election and markets seem unrecognizable" adding that the Trump election represented a paradigm shift. Fiscal easing would take over from monetary easing and would allow for the dollar and rates to rise in unison, a trend not seen for a while.

Less than two months ago, after the Algiers meeting but before the Vienna OPEC summit when speculation was rife that the cartel would be unable to reach a deal to cut production, we reported that "US Oil Producers Are Hedging At Levels Not Seen Since 2007" in which we wrote that "while OPEC has been busy desperately jawboning oil higher, US producers have been worried about oil's reacquaintance with gravity. As a result, as the EIA reports, the amount of WTI short positions held be producers and merchants is just shy of a decade high."

The key economic releases this week are ISM non-manufacturing on Monday and University of Michigan consumer sentiment index on Friday. There are a few scheduled speaking engagements from Fed officials this week.

Away from the US economic calendar, initially focus will be on the Italian referendum result, which already appears to have been largely digested by the market, despite a variety of unknown consequences still to emerge. It will then shift quickly to a critical ECB meeting.

In another sign that conventional diplomatic protocol is changing on a daily basis, on Monday Japanese Prime Minister Shinzo Abe said he would visit Hawaii on Dec. 26 and 27 for his final summit meeting with outgoing U.S. President Barack Obama, and to remember the victims of Japan's Pearl Harbor attack 75 years ago.

As Reuters reports, the visit will make Mr Abe the first sitting Japanese prime minister to visit Pearl Harbour since his country’s surprise attack on the Hawaiian port began the Pacific war 75 years ago.