The U.K. pound hit a fresh 17-month low against the U.S. dollar on Tuesday

Good Morning,

- Euro hits fresh nine-year low at 1.1843 on Asia trading, with eyes now on eurozone inflation data later today.

- Worries about the world economy drove investors into safe-haven sovereign debt. Government borrowing costs reached all-time lows as oil fell 10 percent in just two days and investors wrestled with the risk of global deflation.

- With fears of global deflation , yields on longer-dated Japanese, German, French, Dutch, Austrian, Belgian, Finnish, Canadian and Australian bonds all touched record lows.

- Eurozone inflation data are expected to show the first annual fall in consumer prices since 2009, piling pressure on the ECB to launch all-out quantitative easing at its next policy meeting on Jan 22.

- Central banks and reserve managers are breaking from past practice by showing little appetite to add euros as the currency tumbles. The total amount of reserves held in euros fell 8.1 percent in the third quarter, more than the currency’s 7.8 percent decline in the period against the dollar, according to the most recent figures from the International Monetary Fund. The last two times the euro depreciated 7 percent or more in a quarter, 2011 and 2010, holdings declined much less. The data suggest reserve managers are passing up the chance to buy euros while they’re cheap, removing a key pillar of support.

- Reports that Germany was making contingency plans for the possible departure of Greece from the euro zone gives more pressure to euro. Tabloid newspaper Bild cited unnamed government sources saying Berlin was running scenarios for the Jan. 25 Greek election in case of a victory by the leftwing Syriza party.

- Bank of Tokyo-Mitsubishi on EUR/USD: Excessive selling if ECB QE above this level. The 11.8% depreciation of the euro versus the dollar in 2014 was the largest since the 12.6% decline in 2005, notes BTMU. "We now expect a sovereign debt QE program of at least EUR 500bn to be announced in January. At least that amount is required in order to expand the balance sheet to the EUR 3trn level reached in early 2012," BTMU adds. "The greater the QE sum is above the EUR 500bn level, the greater the scope for further EUR/USD selling," BTMU argues. Political Uncertainty Matters Too... "The added political uncertainty at the outset of 2015 mixed with the high probability of the launch of sovereign debt QE will result in a further weakening of the euro. We show a bias for a more pronounced weakening in the first half of the year as US market interest rates finally respond to pending FOMC tightening," BTMU adds.BTMU sees EUR/USD at 1.15 in 6 months and 1.12 by the end of the year.

- The U.K. pound hit a fresh 17-month low against the U.S. dollar on Tuesday and currency experts are split on which way the currency will head next. New U.K. data on Tuesday from financial services firm Markit showed activity in the services sector hit a 19-month low in December, with the index suffering its biggest decline in more than three years.

- According to estimates of the German Federal Statistical Office (Destatis), retail turnover 2014 in Germany is expected to be in real terms between 1.1% and 1.3% larger than that in 2013. In nominal terms turnover is expected to increase by between 1.5% and 1.7%. This estimation is based on data for the first eleven months of 2014.

- New orders for U.S. factory goods fell for a fourth straight month in November, pointing to a slowdown in manufacturing activity and overall economic growth. The Commerce Department said yesterday new orders for manufactured goods dropped 0.7 percent after an unrevised 0.7 percent fall in October.

- Brent oil eased another 17 cents to $50.93 a barrel having already shed almost 10 percent so far this week. U.S. crude dipped 13 cents to $47.80, after plumbing an April 2009 low of $47.55.

- Watch today: German jobs, Eurozone CPI, US payrolls and Fed’s Minutes.

Have a nice Day !