China's Official manufacturing PMI contracts in december

China's official manufacturing PMI slipped to 50.1 in December from 50.3 in November, as a property slump continues to have a knock-on effect on manufacturers in many industries, from construction machinery to furniture. With the soft figures, many analysts expect Chinese GDP in Q4 to slow only marginally from 7.3% in Q3, meaning full-year growth will undershoot the government's 7.5% target and mark the weakest expansion in 24 years.

Oil prices began the New Year on a volatile note as Brent whipsawed between gains and losses after closing 2014 at more than five-year lows. The benchmark attempted a rebound early in the session, but pared the gains later on. Brent is now up 0.4% at $57.57/bbl, about $1 below the day's high at $58.54.

Eurozone manufacturing PMI remained subdued in december With ECB stimulus in sight.

Eurozone manufacturing PMI remained subdued in December (below a flash estimate of 50.8) at 50.6, but above November's 16-month low of 50.1. "The weakness of factory output, combined with the subdued service sector growth signaled by the flash PMI, suggests the eurozone economy grew by just 0.1% percent in Q4," says Markit. France and Italy's manufacturing sector continued to shrink in December, although Germany's figure was in line with earlier flash estimates at 51.2, as more new orders helped lead a return to growth.

 

Weak eurozone manufacturing, the euro started off the new year at 29-month lows. The currency sank as far as $1.2048, a level not seen since mid-2012, while the dollar notched up a near nine-year peak against a basket of major currencies following its best year since 2005. The euro is now dangerously close to its 2012 trough, and major chart support, at $1.2042. A break there would take it to territory not seen since June 2010.

JPMorgan's Asian Infrastructure fund is in advanced talks to partner with Indian carrier SpiceJet's co-founder, Ajay Singh, for a planned $200M investment into the cash-strapped airline. JPMorgan (NYSE:JPM) and Singh, who have so far invested about 170M rupees in SpiceJet to help it clear dues to oil refiners, plan to finalize the deal in a month’s time.

BOJ under pressure as CPI slowed & contraction seen in factory output

Keeping the BOJ under pressure, Japan core consumer inflation slowed to 0.7% in November, far below the central bank's 2% target. Factory output also unexpectedly fell and real wages marked their steepest drop in five years, dealing a blow to PM Shinzo Abe's stimulus policies aimed at pulling the world’s third-largest economy out of stagnation.

Russia may lose its investment-grade credit rating

For the first time in a decade Standard & Poor’s placed the country on CreditWatch Negative. The move "stems from what we view as a rapid deterioration of Russia’s monetary flexibility and the impact of the weakening economy on its financial system," the agency said in a statement. S&P will resolve the CreditWatch upon the conclusion of its review, which is expected by mid-January.

Oil is climbing again today as investors increased bets on rising prices following Saudi Arabia's confidence that crude will rebound as global economic growth boosts demand. Blaming the fall in oil prices on speculators and the lack of cooperation from non-OPEC producers, Saudi Arabia also announced that it would not cut output even if non-OPEC nations did so. Brent crude is up 1.2% at $62.13/bbl. WTI is up 0.9% at $57.64.