Panic in markets: RUB down 20% at one point, EUR/NOK up 7%

•     Panic in markets: RUB down 20% at one point, EUR/NOK up 7%

–    Russia is heading for a financial crisis – capital controls would seem necessary

–    Sharp move in NOK in 2 hrs completely unwound in the next 4 hrs = panic

•     Panic continues to grip oil markets, which ignore bullish news

–    Fall in output in North Dakota, Libyan fighting shuts down ports, but no reaction

–    Oil should eventually stabilize, bringing stability to other markets, but technical momentum indicators suggest it’s not likely to happen today

•     US housing starts & building permits: who cares?

–    Fundamental news is being ignored as the market watches oil and Russian panic

•     Today:

–    Eurozone: Final CPI for November

–    UK:  Minutes from BoE meeting: still just 2 dissenters or 3 now?

–    US: FOMC meeting: big question is over what they do with the “considerable time” phrase. My view:  they replace it with another that indicates still a delay before hiking, but just not as long a delay. Also look for new economic & interest rate forecasts. Economic forecasts to be revised up, but interest rate forecasts may be revised down a bit due to softer inflation outlook. Result could be consistent with current market pricing of first hike in June = little market impact after all