Malaysia

· Malaysia To Unveil Policy Changes Tuesday As Oil Earnings Slide. Malaysian Prime Minister Najib Razak will announce policy changes, including likely budget revisions, on Tuesday to help its oil exporting economy adjust to the impact of slumping global crude prices. Southeast Asia's third largest economy relies on oil and gas export revenues to maintain strong growth and control a mountain of debt, and the adverse turn in the crude market has put its current account balance under strain, and ruined budget projections. A 10% fall in the ringgit currency during the past four months reflects investors' mounting worries, as the government's budget for 2015 was based on overoptimistic forecasts for oil prices and economic expansion. (Reuters)

Asia

· Chinese Banks Buy The Most Yuan In Seven Years In December. China's central bank and commercial banks bought the most yuan in seven years in December at around $19 billion, a Reuters calculation of data showed, suggesting some capital is leaving the world's second-largest economy as its growth slows. China's central bank and commercial banks sold 118.4 billion yuan ($19.05 billion) worth of foreign exchange on a net basis in December, according to a Reuters calculation of central bank data released on Monday. That was the most foreign exchange that Chinese banks have sold to clients since December 2007, and suggests that investor appetite for Chinese assets may have waned as its economy loses steam. (Reuters)

Americas

· Brazil Raises Taxes By $7.5b In Quest For Confidence. Brazil’s government will raise taxes on fuel, imports, credit and cosmetics as part of efforts to restore confidence in its fiscal discipline, Finance Minister Joaquim Levy said. The measures will increase revenue by more than 20b reais ($7.5b), he told reporters Monday in Brasilia after markets closed. As part of the new policy, Brazil will resume collection of the so-called Cide tax on fuel and raise taxes on loans to individuals and imports. It will also change the system used to collect taxes on cosmetic products, he said. (Bloomberg)

Europe

· IMF's Lagarde Urges ECB To Share Risks In Any Bond-Buying. The European Central Bank (ECB) should make sure any quantitative easing (QE) program it embarks on shares as much risk it can amongst its members, the head of the International Monetary Fund said on Monday. Markets expect the ECB to announce on Thursday that it will start printing money to buy government bonds in euro zone countries to prevent deflation. "The more efficient it is, the more mutualization there is the better," IMF managing director Christine Lagarde told a news conference when asked about the idea of individual central banks taking responsibility for losses on their bonds. (Bloomberg)

· Britain's Financial Sector Reports Fastest Growth Since 1996 In Fourth Quarter: CBI. Britain's financial sector reported the biggest upsurge in business in nearly 20 years in the final three months of last year, the Confederation of British Industry said on Monday. The CBI said its quarterly financial services business volume index rose to +57 in December from +49 in September and its highest since December 1996. "The upswing in growth among financial services firms continues on a solid footing, with overall optimism, business volumes and profits up," said Rain Newton-Smith, the CBI's director of economics. The upbeat figures contrast with official data, which showed that financial services output in the three months to October was 3.2% lower than a year earlier. (Reuters)

· Denmark Says It Has Tools To Defend Peg After Surprise Cut. Denmark moved to quash speculation it may follow Switzerland and abandon its euro peg, delivering a surprise interest-rate cut to prevent the krone gaining further. “We have the necessary tools to defend the peg,”Karsten Biltoft, head of communications at the Copenhagen-based central bank, said by phone. Asked whether Denmark could ever consider abandoning its currency peg, he said, “Of course not.” The Danish bank today cut its deposit rate to minus 0.2%, matching a record low, from minus 0.05% and lowered its lending rate to a record 0.05% from 0.2%. While the bank can adjust rates at any time, it traditionally announces changes on Thursdays and mostly in connection with ECB moves. (Bloomberg)

· Germans Perceive Deflation For First Time Since 2009, Study Says. German consumers feel they are experiencing deflation for the first time since the height of the global financial crisis in 2009, a survey showed, despite a slight rise in the cost of living in Germany in December. This perception could help boost private consumption in the months ahead, economists said. The actual euro zone inflation rate has already turned negative, but in Germany annual consumer prices harmonized to compare with other European Union countries rose 0.1% in December -- still a more than a five-year low. Germans thought that prices in Europe's largest economy had dropped 1.2% in December however, after stagnating in November, the survey by UniCredit showed. (Reuters)

· IMF's Lagarde Warns Of Consequences To Greek Debt Restructuring. Leftist Syriza, which widened its opinion poll lead over the ruling conservatives ahead of the Jan. 25 vote, says it will cancel austerity imposed under the bailout and calls for an international conference to renegotiate debts of Greece and some other euro zone stateIts leader Alexis Tsipras has suggested a conference modeled on the 1953 meeting in London at which Western powers agreed to cut the debts of West Germany by 50% after World War Two. In December, he called for a similar "moment of solidarity" with Greece. "As a principle, collective endeavors are welcome but at the same time a debt is a debt and it is a contract," IMF Managing Director Christine Lagarde told The Irish Times in an interview on Monday when asked about the general idea of holding a debt conference. "Defaulting, restructuring, changing the terms has consequences on the signature and the confidence in the signature," she said. (Reuters)

Currencies

· Swiss Franc Weakens Slightly, But Remains Lofty Versus Euro, Dollar. The Swiss franc edged lower against major crosses in choppy European trade on Monday, but remained at historical highs, as investors turned their focus to the European Central Bank meeting this week.The Swiss franc hovered around parity against the euro, holding onto a 16% year-to-date gain against the single European currency after last week’s unexpected decision by Switzerland’s central bank to drop its euro peg. The franc was last down 1% to 1.0044 francs. Against the dollar it was down 0.8% to 0.8659 francs — a 13% drop year-to-date. Among other currency pairs, the euro was at $1.1599, from $1.1567 late Friday in New York. The greenback was at ¥117.26, after dipping to ¥116.92 earlier in Asia. The dollar was at ¥117.61 late Friday in New York, buoyed by strong U.S. consumer sentiment data and a recovery in U.S. Treasury yields. (Marketwatch)

Commodities

· Oil Slips $1 On China Economy Worries, Record Iraq Output. Brent crude oil prices fell below $49 a barrel and U.S. crude also fell more than $1 on Monday after the global economic outlook darkened and Iraq announced record oil production. The world's biggest energy consumer, China, faces significant downward pressure on its economy, its premier Li Keqiang was quoted by state radio as saying on Monday. Brent crude settled at $48.84 a barrel, down $1.33. U.S. benchmark crude was last trading down $1.17 at $47.52 a barrel. (Reuters)

· Gold Slips From Four-Month High, Haven Appeal Lends Support. Gold eased from four-month highs on Monday as investors cashed in some of last week's hefty gains, though prices were still supported by wider market volatility that boosted the metal's appeal as a haven from risk. A market rout after Switzerland unexpectedly abandoned a cap on the franc last week triggered strong bids for gold, often seen as an alternative to risky assets, sending prices to their highest since September at $1,281.50. Spot gold was down 0.4% at $1,274.61 an ounce at 1652 GMT, while U.S. gold futures for February delivery were down $1.50 an ounce at $1,275.40. Spot gold is up nearly 8% this year. Silver was down 0.3% at $17.68 an ounce, while platinum was flat at $1,263.25 and palladium up 0.4% at $754.22. Palladium bucked the trend for precious metals last week, falling more than 6%. (Reuters)