Today will be all about US inflation, as the market continues to give itself this year's and next year's generous Xmas presents in advance of its projected retreat. However, I am still focusing less on gift-wrapped data, and more on the lumps of coal that point to upside risks to 2024 inflation.

'COP28's watered down draft text criticised for omitting fossil fuel 'phase out'', screams one headline. "Phase out" was phased out as the COP28 draft text suggests "reducing" use of fossil fuels instead after heavy Middle East oil-producer lobbying, making it COP-OUT28 in the eyes of some. It remains to be seen what this means in terms of the outlook for energy prices.

Meanwhile, in the Middle East, it's oil and water which matter. Especially as Yemen's Houthis have officially announced they will attack Israeli vessels and any ships carrying cargo to or from Israel via the Red Sea or Arabian Gulf. Welcome to how the world used to work before British, then US, naval supremacy. This is what a multipolar world is going to look like, if we see one.

We are likely to get a US naval reaction. Combined Task Force 153 Operations was set up in 2022 to stop Red Sea piracy, but will need to be expanded from the US and Egypt: France already helped out last weekend by shooting down Yemeni drones aimed at Israel. Yet it's still only reactive to attacks on shipping, not proactive at the source. That maintains the risk shipping diverts from Suez round the Cape of Good Hope: if so, global carriers would only be able to make 3-4 Asia-Europe roundtrips per year, not 4-5, a massive structural drop in supply capacity. The Financial Times warns 'Global pre-Christmas Trade at risk from twin Canal crises', including the drought in Panama cutting passages there. But it's far more than just pre-Christmas trade at risk.

Indeed, we are likely to get an Israeli reaction to this Yemeni (slash Iranian) casus belli to stop it at source; and Israel is also close to establishing a fixed deadline for Hezbollah to retreat north of the Litani river, after which it will attack them south of it. In short, key dominoes could yet topple towards a regional escalation impacting both the Suez Canal and energy markets.