Watch for a big pop in the ASX 200 this morning after the US Fed meeting changed its outlook on interest rates to bring forward a rise into mid-2015.

Markets are becoming more febrile as the oil price plunge rattles confidence around the world – and Russia is emerging as a major concern.

The second major deal in the current slide in oil prices surfaced at the weekend , it’s a biggie – Repsol, the Spanish oil giant is planning to offer up $US8 billion for the Canadian independent, Talisman. With debt, any bid for Talisman, one of Canada’s biggest oil and gas independents, could be worth in excess of $US11 billion.

There’ll be renewed confirmation this week that the Chinese economy continues to slow.

In any week, the final meeting of the year of the US Fed’s key policymaking committee would normally dominate events, but this week global markets will be more concerned with the slide in oil prices and the way they are sending shares and bond prices lower.

Another miserable Friday has set up Asian markets for a nasty sell-off today, which will be complicated in Australia by the release of the mid-year economic statement from the embattled Abbott Government just after midday.

It was the fastest pace of jobs growth since March 2012, but also the highest unemployment rate for 12 years – two readings from the November jobs data which confounded some of those looking for rate cuts and sent the Aussie dollar higher, as well as helping halt a worrying sell off on the ASX yesterday morning.

Another rough day on financial markets can be expected today after US oil prices fell under $US60 a barrel for the first time this morning, US time.

Our market is heading for a nasty 50 point fall at the open Thursday after commodities, led by oil, sold off and markets in Europe and especially the US fell sharply.

The New Zealand Reserve Bank has again left its key interest rate on hold as the economy continues to burble along in a comforting burst of low inflation growth.

Inflationary pressures in China are intensifying as economic activity slows.

Don’t listen to the stuff being talked about more interest rate cuts to boost a flagging economy next year – just look at the home loan figures from the Australian Bureau of Statistics yesterday.

APRA, the Australian Prudential Regulation Authority and the key banking regulator, has waggled its fingers at home lenders and warned them they will be picked off individually where they engage in what the regulator believes is imprudent home lending activities, especially with investors.

Monday’s solid bank-driven gain will be reversed on the ASX today with the futures market pointing to a 30 point – plus drop in the wake of another night of losses for oil prices.

More worrying news from China in the details of the country’s November trade report.

Japan heads into its snap election this Sunday with the economy in a deeper recession than previously thought – but don’t tell voters who will overwhelmingly re-elect Prime Minister Abe; or the stockmarket, which regained the 18,000 point mark yesterday for the first time since the middle of 2007.

Commodity prices – especially oil – remain the big driver of activity and sentiment in financial markets, and a state of glum acceptance that lower oil prices are here to stay for quite a while, is now taking hold among investors.

Markets in Australia this week will be dominated by the reaction to the release yesterday of the Financial System Inquiry by David Murray, along with the November jobs data on Thursday, but for markets here and around the world, the really big news will be the monthly economic data from China.

For all the nervousness in western markets, especially Australia, about oil and other energy shares, the market to increasingly keep a close eye on is China, where the volatility we told you about last week, shows no sign of ending.

New four year lows for the Aussie dollar overnight as the currency’s slow decline continues, much to the relief of the Reserve Bank and despite some reasonable retail sales and trade account figures for October.