• Crude Soars as Output Deal Weighs on Bonds; China Shares Tumble (BBG)
• 10-Year Treasury Yield Above 2.5% for First Time in Two Years (WSJ)
• The New Reality of TV: All Trump, All the Time (NYT)
• Fed May Struggle to Signal What Comes After December (WSJ)
• China warns Trump against ignoring its Taiwan interests (Reuters)
• China’s Stocks, Bonds, Yuan Slump in Unison on Liquidity Concern (BBG)
• Sovereign funds pulled cash from world markets for third year running (Reuters)
• Trump Adds To Criticism Of Companies (WSJ)
• Oil surges to 1 1/2-year high, Fed rate increase looms (Reuters)
• Iraq to abide by OPEC cut, expects output growth in future (Reuters)
• It All Went Wrong for Chinese Investors Today (BBG)
• Senators Balk at Tillerson Before He’s Nominated (BBG)
• Syrian army in ‘final stages’ of Aleppo offensive (Reuters)
• London House Prices Are Having Their Worst December in Years (BBG)
• Small Investors Join China’s Tycoons in Sending Money Abroad (NYT)
• The Complexity of Inequality (ProSyn)
• ‘3, 2, 1, Boom’ — Silver-Fixing Allegations Detailed in Private Chats (BBG)
• China Finds New Fans in Southeast Asia as U.S. Turns Inward (BBG)
• JPMorgan Traders Back Risky Property Deals as Bank Shows Caution (BBG)

Overnight Media Digest

WSJ

– President-elect Donald Trump escalated a fight with the U.S. intelligence community on Sunday by denouncing its findings of Russian meddling in the U.S. election, setting up an extraordinary rupture between a soon-to-be president and his national-security establishment. http://on.wsj.com/2gQau27

– Exxon Mobil Chief Executive Rex Tillerson, the top choice for secretary of state in a Trump administration, faces bipartisan resistance in Congress over his ties to Russian President Vladimir Putin. http://on.wsj.com/2gQ48zS

– Aircraft giant Boeing clinched a deal to sell 80 jetliners to Iran, completing the first major agreement between a U.S. company and the Islamic Republic at the very moment the political winds are changing. http://on.wsj.com/2gQ4hDw

– Islamic State fighters retook the ancient city of Palmyra on Sunday, an embarrassing setback for thousands of Syrian government troops and their Russian allies defending the area after it was captured from the extremists early this year. http://on.wsj.com/2gQ1Ctk

– Hyundai Merchant Marine said Sunday it has reached an agreement to form a cooperative relationship with the world’s largest container-shipping alliance. Under the deal, Hyundai will share surplus capacity and purchase cargo slots with the shipping network, called the 2M Alliance, which is made up of Denmark-based Maersk Line and Switzerland-based Mediterranean Shipping Co. http://on.wsj.com/2gQ0l5E

– Honda Motor has invested an undisclosed sum in GrabTaxi Holdings Pte Ltd, boosting the Singapore ride-hailing firm’s capital so it can fend off Uber Technologies Inc’s widening reach in Southeast Asia. http://on.wsj.com/2gQ0DcP

– A bomb exploded at Cairo’s main Coptic Christian cathedral compound on Sunday, killing at least 25 people and wounding another 49, in the largest attack on a Christian house of worship in Egypt since 2011. http://on.wsj.com/2gQ4c2B

FT

– Tesco Bank has issued sequential debit card numbers and exposed customers to cyber crime. This is a practice most banks avoid because it lets hackers remain undetected while working quickly through thousands of accounts, according to rival lenders.

– Monte dei Paschi di Siena’s board is making a last-ditch attempt to raise 5 billion euros by the end of 2016 in a quest to stave off a state bail-out for the world’s oldest surviving lender.

– Boeing and Iran’s national carrier have finalised their $16.6 billion deal for the sale of 80 aircraft to the Islamic Republic’s airlines. The deal marks the first large contract with a US company since the 1979 Islamic Revolution.

NYT

– Middle-class Chinese are using new technology to move their wealth out of the country and into American investments, from San Francisco to New York. http://nyti.ms/2hknwpl

– Boeing Co announced a $16.6 billion deal on Sunday to sell planes to Iran, which for decades had been economically blacklisted by the United States. The company, instead, chose to emphasize how many jobs the sale would support. http://nyti.ms/2hkeJGR

– Rex Tillerson, Exxon Mobil’s chief executive and a secretary of state candidate, has a relationship with Russia that could be both a strength and his Achilles’ heel. http://nyti.ms/2gqSmLf

– President-elect Donald Trump, defending his recent phone call with Taiwan’s president, asserted in an interview broadcast on Sunday that the United States was not bound by the ‘One China’ policy, the 44-year diplomatic understanding that underpins America’s relationship with its biggest rival. http://nyti.ms/2gC7Ejy

– A Massachusetts start-up is part of a new wave of efforts in the United States, Europe and Asia to improve battery technologies as consumers demand more from phones and cars. http://nyti.ms/2hetxX3

Britain

The Times

– Tata Steel has promised not to take any dividends from its British plants until their profit tops 200 million pounds a year. The company made the pledge last week as part of a plan that will keep the Port Talbot site in south Wales open until at least 2021. It promised no job cuts for five years and to pump £1bn into its plants around Britain over 10 years. http://bit.ly/2gtTxP2

The Guardian

– Sadiq Khan has called on the government to secure proper compensation from Volkswagen for the “dieselgate” scandal, saying the 1.1 million pounds pledged so far was outrageous. The London mayor said the settlement was far too low compared with the 12 billion pound payout achieved by US authorities for the carmaker’s use of sophisticated “defeat devices” to cheat emissions tests. http://bit.ly/2gtPMZL

– Iran said it has finalized a $16.8 billion deal with Boeing to purchase 80 passenger planes from Boeing. IRNA news agency said 50 Boeing 737s and 30 Boeing 777s would be delivered over the next decade, in the biggest agreement to be struck with an American company since the 1979 revolution and US embassy takeover. http://bit.ly/2gtRcDw

The Telegraph

– Big Sofa, a video analytics technology company, is understood to be raising 6 million pounds through a placing and subscription, valuing the business at 10 million pounds, with shares expected to begin trading next week. The company hopes the fundraising will help it expand in the US, which it expects to be one of the largest markets for video analytics. http://bit.ly/2gtTsdW

Sky News

– Twenty-First Century Fox has tabled a takeover bid for Sky, the owner of Sky News. The cash offer values Sky shares at 1075 pence each, which is less the value of any dividends paid subsequently by Sky, putting a valuation on the company of 18.48 billion euros. http://bit.ly/2gtPsdM

– Chris Woodhouse has stepped down as chairman of 3i Group’s Agent Provocateur. The move comes amid an inquiry into “accounting issues” which may relate to statements about the company’s profitability. http://bit.ly/2gtPQbW

The Independent

– Foreign Secretary Boris Johnson has stressed Britain’s close ties with Saudi Arabia, days after he was rebuked by Downing Street for accusing the kingdom of being behind “proxy wars”. http://ind.pn/2gtVfzG

This morning Trump has confirmed his intention to nominate retired Marine General John Kelly to head the Department of Homeland Security, a pick that had been rumored for days.  In a statement, Trump highlighted Kelly’s experience in defending the homeland from threats of terrorism and said that he was the right person to “spearhead the urgent mission of stopping illegal immigration and securing our borders.”

  “Gen. John Kelly’s decades of military service and deep commitment to fighting the threat of terrorism inside our borders makes him the ideal choice to serve as our Secretary of the Department of Homeland Security.”

“He is the right person to spearhead the urgent mission of stopping illegal immigration and securing our borders, streamlining TSA and improving coordination between our intelligence and law enforcement agencies. With Gen. Kelly at the helm of DHS, the American people will have a leader committed to our safety as well as one who will work hand-in-hand with America’s rank-and-file TSA, ICE and Border Patrol officers.”

Per The Hill, Kelly vowed to “take back sovereignty at our borders and put a stop to political correctness.”

 “The American people voted in this election to stop terrorism, take back sovereignty at our borders, and put a stop to political correctness that for too long has dictated our approach to national security,” Kelly said in a statement. “I will tackle those issues with a seriousness of purpose and a deep respect for our laws and Constitution.”

Immigration hard-liners had been routing for Trump to appoint Kansas Secretary of State Kris Kobach as head of the Department of Homeland Security.  Kobach was generally viewed as the candidate most likely to draw the hardest line on illegal immigration after helping to draft one of the toughest pieces of immigration law in the country, Arizona’s SB 1070, which requires law enforcement officers to demand to see the immigration papers of anyone they suspected of being in the country illegally.

By choosing Marine General John Kelly, immigration experts fear that the Trump administration will focus more on border security, as it relates to terrorist threats, but will not emphasize the deportation of the millions of illegal citizens already in the country.

Still others, including the ever skeptical New York Magazine, view Kelly simply as a “Trojan Horse” who has a better chance at Senate Confirmation for the top DHS position but will then use that role to appoint an immigration hard-liner, like Kobach, to the Deputy Secretary position.

 Perhaps most important, Kelly is not Kris Kobach, the fiery crusader against immigration “amnesty,” alleged voter fraud, and nefarious Muslim plots to rob Americans of their priceless heritage of freedom. The name of the Kansas secretary of State, who is a big-time national celebrity among hard-core conservatives, had often been mentioned in connection with the DHS gig.

But before anyone starts celebrating over Kobach’s continued confinement in Topeka, it might be wise to pay attention to some intel the Washington Examiner provided earlier this week:

Kansas Secretary of State Kris Kobach and retired Marine Gen. John Kelly are likely to be tapped for secretary and deputy secretary of homeland security, according to a top transition official familiar with the president-elect’s current thinking, but the source would not reveal which of the two men is favored for the top post and which is likely to be deputy secretary.

If that is correct, it is entirely possible Team Trump decided to make the less controversial Kelly — who faces a much easier Senate confirmation — the figurehead at the top of DHS, while installing Kobach as his deputy with special responsibilities for immigration and anti-terrorism policy. And there is also the option of placing Kobach at the Justice Department with authority over enforcement of immigration and voting laws. Crediting the upcoming administration with a “moderate” cabinet appointment might be accurate but also misleading.

With one more pick officially on the record, all eyes turn to the Secretary of State position.