Overnight

The Nikkei benchmark is up 2% this year, but trading  was thin Monday around Asia as the Nikkei 225 fell 0.2% to 19,395.99 in early trading after the market in Japan was closed on Friday as thin trading around the Christmas holiday held sway with some markets in the regions still closed.

Japanese stocks are expected to close out the year in positive territory for 2016 even as volume remains thin,some analysts have noted.In other markets the Shanghai Composite index was off 1%; the Kospi up[ 0.01%; and Taiwan's market was higher by 0.2%. The Wall Street Journal reported: Asian shares were a mixed bag on Monday as trading volumes were thin because of the Christmas holidays, with some major markets in the region still closed.. Markets in Australia, New Zealand, Hong Kong were closed.

As attention shifts to the U.S. with its new administration set to takeover in early January and the threat of a rising dollar,inflation and rising interest rates investor confidence has picked up in recent weeks. Reurers noted such overnight,saying: Japanese equity markets have surged in the four years since Prime Minister Shinzo Abe took office, with the Nikkei hitting an almost two-decade high in June 2015, on hopes his Abenomics policies of monetary stimulus, fiscal expansion and structural reforms would end decades of deflation and stagnation. Japanese equities have been underpinned by the yen's weakness against the dollar on expectations that the incoming administration would boost economic growth and inflation via increased infrastructure spending, tax cuts and reduced regulation.

After a long year of expected interest rates hikes the Fed has delivered just one as it has repeatedly overestimated the strength of the U.S. economy in the eyes of many. Fed Chair Janet Yellen at her last public economic powwow noted that three rate hikes are in store for 2017. Given that we now know most of the jobs the Obama administration created were part-timers with few or no benefits that might be a stretch, to say the least. Art for art's sake is one thing, but normalizing the economy just to be normalizing it is another. Yellen also has lame duck written all over her, so geopolitics might prove surprising in the new year. And so might the prices of gold and oil.