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Stock futures pointed to muted gains for major indexes ahead of a busy week of central-bank decisions in major economies.

Investors are sitting tight ahead of a monetary-policy decision by the Federal Reserve and announcements from the Bank of England, European Central Bank and Bank of Japan later in the week.

The Fed is expected to accelerate the pace at which it is paring its bond-buying program and to signal that it will raise interest rates next year to tap the brakes on inflation. Data published Friday showed consumer prices increased in November at the fastest annual rate since 1982.

Gregory Perdon, co-chief investment officer at Arbuthnot Latham, said he expects stocks to keep rising even as the Fed tightens monetary policy.

"The classic textbook would be rates up, stocks down," Mr. Perdon said. "The reality is there's so much liquidity out there, there's so much demand to get a return on assets that ultimately we're going to have to have a much...more aggressive tightening to knock stocks."

Meanwhile, the global economy will continue to recover from the pandemic-induced shocked in 2022 and it is projected to expand 4.2%, UniCredit's group chief economist Erik F. Nielsen said.

The forecast is lower than the 4.6% expansion previously expected as more severe and longer-lasting supply bottlenecks as well as higher inflation are likely to slow growth, he said.

However, the outlook is subject to many uncertainties such as the evolution of the Covid-19 pandemic, supply-side strains, energy prices, behavior of central banks, and increasing geopolitical risks, he said.

"We'll be entering 2022 with more unknowns--from economics, to politics and policies, to markets--than I can recall ever having faced in my almost 40 years as an economist," Nielsen said.

Stocks to Watch:

Dollar Tree said activist investor Mantle Ridge, which is seeking to replace the retailer's entire board, "has been unwilling to engage with us constructively and has instead chosen to proceed in such an unwarrantedly aggressive and hostile manner."

Mantle Ridge last week nominated a slate of directors to replace the 11-member board of the discount retailer. It also urged Dollar Tree to hire Richard Dreiling, former chairman of rival Dollar General, to a "leadership role."

In a regulatory filing late Friday, Mantle Ridge said Dollar Tree would "benefit from a refresh of the membership of the board."

Dollar Tree issued a statement on Sunday, saying that "Mantle Ridge's overreach in seeking to replace our full board with its own hand-picked slate -- despite having no ideas or plans to improve on our business or operations -- is not justified nor would it be in the best interests of Dollar Tree shareholders."

Dollar Tree said it met with Mantle Ridge, which owns a 5.7% stake in the retailer, on Dec. 2. At that meeting, Dollar Tree said the "only operational suggestion" made by Mantle Ridge -- that Dollar Tree should sell merchandise at Family Dollar stores -- "is something Dollar Tree has already been doing for several years."

Forex:

The dollar rose ahead of a busy week for central bank meetings. Wednesday's Fed announcement should lift the U.S. currency while Thursday's decisions by the European Central Bank and the Bank of England are likely to dent the euro and pound, said UniCredit.

The dollar "is likely to benefit from the Fed announcing an acceleration in the speed of its tapering process," it said.

This prospect, combined with the ECB likely remaining "quite accommodative" should continue to weigh on EUR/USD. The Bank of England is likely to delay plans to start raising interest rates, which won't help the pound, UniCredit said.

Policy decisions from the ECB and Fed this week could push the euro versus the dollar to new lows for the year, ING said. One of the challenges the ECB faces at Thursday's policy meeting will be exiting its Pandemic Emergency Purchase Programme without causing too much disruption to the European bond market, particularly bonds of struggling peripheral countries, ING analysts said.

"The core outcome, however, should be the ECB wanting to keep all its options open into 2022." In contrast, the Fed is under political pressure to rein in its loose policies at Wednesday's meeting, the analysts said. ING sees EUR/USD potentially falling below the "1.1200 lows."

Turkey's lira slumped 4% to trade at 14.46 to the dollar ahead of an expected rate cut by the central bank on Thursday.

The Central Bank of the Republic of Turkey has bowed to pressure from President Recep Tayyip Erdogan to lower borrowing costs this year in the face of rapid inflation, hitting the currency hard.

Bonds:

In the bond market, the yield on benchmark 10-year Treasury notes ticked up to 1.492% Monday from 1.487% Friday.

Bonds will become more volatile in the coming years as central banks become less supportive of markets, Daniel Ivascyn, chief investment strategist at Pimco, said.

While the recovery in global economic growth is likely to continue by and large, inflation is a major challenge in the short term, he said. "Inflationary pressures remain significant, but should ease as the economy returns to normal," he said. Pimco continues to position defensively with regard to inflation and interest rate rises. "We want to be forearmed," Ivascyn said.

Commodities:

Oil held modest gains in Europe and Oanda said that If the mild weather turns colder and the continent moves beyond its current spate of Covid-19 restrictions, the rally in oil could accelerate.

The prospect for the oil demand impact from the Omicron coronavirus variant to be limited is one of the factors behind last week's gains, Oanda's Edward Moya said.

On top of that, "OPEC+ continues to have a firm handle on the direction of prices and can disrupt any selloffs with a quick reverse of their output increase," he added. If the mild winter that Europe is currently experiencing turns colder and the continent moves beyond its current spate of Covid-19 restrictions, the oil price rally could accelerate, he added. OPEC releases its monthly market report Monday.

European natural-gas prices jumped more than 8% Monday. Supplies of gas, a key heating and power-generation fuel in Europe, are well below their recent average for the time of year, raising concerns stockpiles will run low as cold weather lifts demand. U.S. natural-gas futures rose 1.9% to $4 per million British thermal units.

Gold ticked higher after data Friday showed U.S. consumer prices rose at their fastest pace in 39 years. The precious metal has long been considered a hedge against inflation and the strong inflation print likely lifts gold's appeal among investors concerned about rising consumer prices.

Copper prices strengthen as investors look ahead to a key meeting of the Fed. The metal, which is often seen as a gauge of global economic health, is ticking higher as central banks across the world are in the process of normalizing monetary policy as global economies recover.

Other base metals also rose Monday, with aluminum up 1%.

TODAY'S TOP HEADLINES

China's SenseTime Postpones IPO After U.S. Blacklisting

Chinese artificial-intelligence company SenseTime Group Inc. said it would postpone its Hong Kong initial public offering, days after it was added to an investment blacklist of companies that the U.S. government says are supporting Chinese military development.

In a statement to Hong Kong's stock exchange, the company said the halt was meant to help investors consider the potential impact of the U.S. blacklisting, adding that it remains committed to completing the listing soon. The postponement comes after the company held off from pricing its IPO as planned on Friday.

Ares Raises $8 Billion Fund in Private-Credit Arms Race

Ares Management Corp. has raised $8 billion dollars for a fund making direct loans to small and midsize U.S. companies, escalating a fight between alternative-asset managers for market share in the burgeoning private-credit market.

Asset-management firms including Apollo Global Management Inc., Ares and Blackstone Inc. are increasingly turning to credit funds to boost assets under management, a key driver of their stock valuations.

Parthenon Capital to Buy Kroll Bond Rating Agency in $900 Million Deal

Private-equity firm Parthenon Capital Partners has agreed to buy a majority stake in Kroll Bond Rating Agency LLC, in a rare instance of a credit-ratings firm changing hands, company officials said.

The deal, which is expected to be announced later Monday, values KBRA at $900 million including debt.

Consumer Finance Startup Dave Eyes Acquisitions, Crypto After SPAC Deal

Personal-finance startup Dave Inc. plans to use the roughly $450 million from its coming public listing for acquisitions, new products and possible investments in cryptocurrency.

The Los Angeles-based company offers an app for people who frequently run short of cash or overdraw their bank accounts, and is in the process of merging with VPC Impact Acquisition Holdings III Inc., a special-purpose acquisition company. The deal is expected to close in the coming weeks and Dave's shares will likely start trading on the Nasdaq in early January, Chief Financial Officer Kyle Beilman said. The merged company is expected to have an equity value of about $4 billion on a pro forma basis.

Pfizer Booster Shots Are Effective Against Omicron Variant, Israeli Study Says

TEL AVIV-A booster shot of Pfizer Inc. and BioNTech SE's Covid-19 vaccine provides good protection against severe illness from the Omicron variant, while those without a third shot are highly vulnerable, according to a new Israeli study.

The findings, similar to those announced last week by Pfizer, suggest countries worried about Omicron's rapid spread will be able to defend their populations with continued inoculation.

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