Malaysia

· Malaysian Palm Oil Falls In Choppy Trade; Oil, Ringgit Slide. Malaysian palm oil futures fell in choppy trade on Monday, dragged lower as oil prices slid to fresh 5-1/2-year lows, although losses in the ringgit and concerns over floods curbing palm supply propped up the market. Oil prices dropped to fresh 5-1/2-year lows on Monday as worries about a surplus of global supplies and lacklustre demand dragged on oil markets. Cheaper oil prices dent energy sector demand for palm as a biodiesel feedstock. However, they have also pulled down the Malaysian ringgit against the U.S. dollar, making ringgit priced palm oil more attractive for overseas buyers and refiners. The ringgit, Asia's weakest currency in 2014, fell 0.6% to 3.5350 on Monday. (Reuters)

Asia

· India's Modi Puts Free-Market Stamp On New Policy Panel. Prime Minister Narendra Modi on Monday named right leaning economist Arvind Panagariya to run his new Policy Commission, hammering a final nail into the coffin of socialist planning that defined the first 67 years of independent India. Panagariya, a professor at Columbia University in New York, will head a bench of thinkers comprising fellow free-market ideologue Bibek Debroy and a former top government scientist who designed a nuclear-capable ballistic missile. (Reuters)

Americas

· U.S. Office Vacancy Rate Lowest Since 2009. The U.S. office vacancy rate fell to 16.7% in the fourth quarter from 16.8 in the third, the lowest since the third quarter of 2009, research firm Reis Inc (REIS.O) said. Greater declines can be expected in 2015 if job gains continue to accelerate, Ryan Severino, the firm's senior economist, said in a statement on Sunday. Washington, D.C. remained the tightest market, with a vacancy rate of 9.2%. New York followed at 9.5%. (Reuters)

· Fed's Williams: "Turbulence" Likely. With the Fed soon to be tightening while the ECB and BOJ boost stimulus, expect turbulence, says San Francisco Fed President John Williams. Speaking to reporters on the sidelines of an economic conference, Williams says a first rate hike this year is appropriate, but tightening past that will be gradual over the following years. Unworried about deflationary pressures, Williams expects the inflation rate to move back up to the 2% target over time. (Bloomberg)

Europe

· Euro Zone Sentiment Recovers In January Despite Greek Risks. Sentiment in the euro zone improve in January for a third month running as investors and analysts shrugged off uncertainty over new Greek elections and their view of longer term economic developments reached its most optimistic level in six months. The Sentix research group's index tracking morale among investors and analysts in the euro zone rose to +0.9 in January from -2.5 the previous month, above a consensus forecast in a Reuters poll for a reading of -1.0. The indes returned to positive territory for the first time since August 2014. (Reuters)

· UK Construction PMI Falls To Lowest Since July 2013: Markit/CIPS. Britain's construction sector grew at its slowest rate since July 2013 last month, industry data showed on Monday, though house building remained robust, with residential construction enjoying its strongest year since at least 1997. The Markit/CIPS construction purchasing managers' index fell to 57.6 in December from 59.4 in November, still comfortably above its long-run average but well below economists' forecasts of a slight decline to 59.0. Readings above 50 denote growth. (Reuters)

· German Inflation Hits Five Year Low Before Crucial ECB Meeting. German inflation slowed to its lowest level in over five years in December, raising pressure on European Central Bank President Mario Draghi to unveil unconventional measures later this month to ward off a deflationary spiral in the euro zone. Preliminary data showed on Monday that annual inflation, harmonized for comparison with other European countries, fell to just 0.1% from 0.5% in November. Nonharmonized data showed consumer prices increasing 0.2% year-on-year in December, down from 0.6% in the previous month. (Reuters)

· Portugal Business Confidence Slips In December. Portugal's economic climate indicator slipped slightly in December, while consumer confidence remained stable at its highest level since 2002, data showed on Monday. December, down from 0.5 the previous month. The index turned positive in May last - the month Lisbon exited an international bailout. The National Statistics Institute also said its consumer confidence indicator was at a negative reading of 22.3 in December, the same as in November. (Reuters)

Currencies

· Euro Recovers From 9-Year Low. The euro stabilized Monday during North American morning trade after falling to its lowest level in nine years despite a weak reading on German inflation for December, as investors bought euros to lock in profits. The final German consumer price index reading for 2014 showed that prices remained flat month over month, missing a consensus estimate of 0.1% growth from economists polled by The Wall Street Journal. The euro fell as low as $1.18 against the U.S. dollar in early trading Monday — its lowest level since March 2006 — and was last trading above $1.19. The ICE U.S. Dollar Index, a measure of the greenback’s strength against a trade-weighted basket of currencies, rose to a nine-year high Wednesday as investors globally bet on a recovery in the U.S. economy. The British pound recovered to $1.525 Monday, after hitting a 17-month low of $1.51 earlier in the session. (Marketwatch)

Commodities

· Oil Extends Crash Into New Year As Glut Fears Deepen. The selloff in global oil markets showed little signs of slowing in the new year, with prices down as much as 6% on Monday, the lowest since spring 2009, as fears deepened a supply glut that has vexed the market for six months would continue. U.S crude crashed below $50 a barrel while benchmark Brent tumbled under $53 after data showed Russian oil output at post-Soviet era highs and Iraqi oil exports near 35-year peaks. U.S. crude settled down $2.65, or 5%, at $50.04 a barrel, and was at a post-settlement low of $49.77 by 3:15 p.m. ET (2015 GMT). The last time U.S. crude traded below $50 was in April 2009. Front-month Brent closed down $3.31, or almost 6%, at $53.11 a barrel. It dropped earlier to $52.66, its lowest since May 2009. (Reuters)

· Gold Climbs 1% On Weak Shares Euro Zone Concerns. Gold rose one% on Monday as global shares fell on concerns over the future of Greece in the euro zone and lower oil prices, while buying from top consumer, China picked up ahead of the Lunar New Year. Spot gold rose to a session-high of $1,201.30 an ounce in earlier trade and was up 0.9% at $1,199.70 by 1520 GMT. It fell to a one-month low of $1,168.25 on Friday, before recovering on lower equities. Among other precious metals, silver rose 2.5% at $16.15 an ounce, while platinum was up 0.9% at $1,211 an ounce and palladium gained 1.2% to $796.00 an ounce. (Reuters)

Treasury

· 10-Year Yield Eyes Sub-2% Handle. Greece jitters have returned in full force to Europe, sending money into U.S. government paper, and the 10-year Treasury yield down six basis points to just 2.05%. Widely acclaimed King of Bond Jeff Gundlach thinks the yield could take out its 2012 modern-era low of 1.38%. Looking at Italian 10-years at 1.78% and Spanish 10-years at 1.56%, one might only fault Gundlach or being too conservative. (Barron)