US Energy Mergers Continue; Cryptocurrencies Retreat

US index futures are flat to start the new trading week, consolidating Friday’s gains. Over in Europe, the Dax is steady and the FTSE is down 0.5%. Treasury yields are creeping back up again as investors await a number of key monetary policy announcements and hints due later this week.

The US Dollar is also on the rebound this morning and a number of commodities and currencies are getting hammered today. Headline drops include a 7.6% plunge for Natural Gas, a 5.0% drop for Ethereum, and a 4.0% slide for Bitcoin. C Copper is down 0.9%, while WTI Crude Oil is flat after clawing back overnight losses. Gold is holding steady just above $2,000/oz.  

It’s the last big week for central bank meetings for the year. The Fed is the headliner on Wednesday, followed by the European Central Bank, Bank of England, and Swiss National Bank on Thursday. Generally speaking central banks are expected to keep their benchmark rates on hold this week. More important for investors will likely be their outlooks and forecasts for 2024 on economic growth, inflation and potential interest rate increases or cuts. Recent market action, particularly sharp declines in treasury yields, suggests investors are expecting central banks to be much more dovish next year and for them to declare victory in the inflation battle.

The last big week for economic news before the holidays is off to a quiet start but ramps up quickly with US Consumer prices (Tuesday) and Producer Prices (Wednesday) both due before the Fed decision. Thursday brings US retail sales and Friday brings China retail sales plus Flash PMI reports from around the world.

The latest round of consolidation in the US oil patch which started with ExxonMobil (XOM) and Chevron (CVX) making big splash acquisitions continues this morning. Occidental Petroleum (OXY) has agreed to purchase privately held CrownRock for $12B, increasing its exposure to the Permian Basin in Texas. Occidental also announced a 22% dividend increase.

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