Global

· Global Business Activity Picked Up In January – PMI. Global business activity accelerated last month as firms cut prices for the first time since the middle of 2013, allowing them to build up a backlog of work, a survey showed on Wednesday. JPMorgan's Global All-Industry Output Index, produced with Markit, nudged up to 52.8 in January from December's 14- month low of 52.4. It has now held above the 50 mark that divides growth from contraction for 28 months. "The start of 2015 saw the Global PMI Output Index at last edge higher, halting the slowdown in growth signaled by the surveys in the latter half of last year," said David Hensley, a director at JPMorgan. But an index measuring prices charged fell below the breakeven mark for the first time since June 2013. Conversely, a gauge of unfulfilled orders moved above the key 50-level. (Reuters)

Asia

· Japan Wages Show Sign Of Pickup In Welcome News For Abe. Japanese wage earners' cash earnings rose in December and declines in real wages slowed for a second month, a positive sign for policymakers' plan to re-charge a recession-hit economy though doubts remain about the prospect for sustained growth in wages. Reflecting improved corporate earnings even as the broader economy has struggled, special payments, predominantly including bonuses, rose 2.6% in the year to December, labor ministry data showed on Wednesday. Winter bonuses likely grew for a second straight year, helping boost overall wages, a ministry official said.The total cash earnings grew 1.6% in the year to December, up for the 10th straight month. Real wages adjusted for inflation fell 1.4% year-on-year in December - down for the 18th straight month - but the pace of falls slowed from the prior month's 2.7% drop. (Reuters)

· China Cuts Bank Reserve Requirement To Spur Growth. China's central bank made a system-wide cut to bank reserve requirements on Wednesday, the first time it has done so in over two years, to unleash a fresh flood of liquidity to fight off economic slowdown and looming deflation. The announcement cuts reserve requirements - the amount of cash banks must hold back from lending - to 19.5% for big banks, a reduction of 50 basis points that would free up 600b yuan ($96b) or more held in reserve at Chinese banks - which could then inject 2-3 trillion yuan into the economy after accounting for the multiplying effect of loans. (Reuters)

· Chinese Provinces Plan $2.4 Trillion Investment To Boost Economy. Fourteen Chinese provinces plan to invest a combined 15 trillion yuan ($2.4 trillion) in infrastructure and other projects starting this year as part of their effort to help set a bottom on a slowdown in the economy, an official newspaper said on Wednesday. Beijing has admitted the economy will continue to feel pressure in 2015. It has pledged no dramatic central governmental investment support, but has offered "targeted easing" aimed at specific sectors and regions. The government is attempting to stimulate growth without setting off another round of poorly planned investment as it did in 2009, which saddled China with a massive debt overhang the system is still trying to digest. (Reuters)

USA

· U.S. Private Sector Adds 213,000 Workers In January: ADP. U.S. private employers added 213,000 jobs in January, falling short of the median forecasts of analysts, a payrolls processor report showed on Wednesday. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 225,000 jobs. December's private payrolls were revised up to 253,000 from the previously reported 241,000. (Reuters)

· U.S. Factory Orders Fall Sharply, Order Books Shrinking. New orders for U.S. factory goods fell for a fifth straight month in December, but a smaller-than-previously reported drop in business spending plans supported views of a rebound in the months ahead. The Commerce Department said new orders for manufactured goods declined 3.4% as demand fell across a broad sector of industries. That followed a 1.7% decrease in November and exceeded economists expectations for a 2.2% drop. Business spending on equipment in the fourth quarter was the weakest since mid-2009, helping to hold back the economy to a 2.6% annual growth pace. In a sign of weakness, unfilled orders at factories slipped 0.8% in December, the first fall in 10 months. (Reuters)

· U.S. Service Sector Activity Edges Up In January. A gauge of growth in the U.S. services sector was stronger than expected in January, though it remained near six-month lows as an index on employment declined sharply. The Institute for Supply Management on Wednesday said its services index was 56.7 in January, up slightly from a revised 56.5 in December. Analysts were looking for a reading of 56.3, according to a Reuters poll. The survey's employment index fell to 51.6 from 55.7, while two other components, prices and order backlogs, were below the 50 level that separates expansion from contraction for a second straight month. (Reuters)

· U.S. Services Sector Growth Accelerates In January But New Business At Record Low – Markit. Growth in the U.S. services sector rebounded modestly in January, though companies reported the weakest level of new business growth in more than five years, an industry report showed on Wednesday. Financial data firm Markit said the final reading of its Purchasing Managers Index for the service sector rose to 54.2 in January, up from both the preliminary read of 54.0, as well as the December read of 53.3, which had matched a 10-month low. The January figure broke a six-month streak of waning growth, having peaked in June with a reading of 61. A reading above 50 separates expansion from contraction. (Reuters)

· U.S. Mortgage Applications Rise In Latest Week – MBA. Applications for U.S. home mortgages rose last week as interest rates fell, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 1.3% in the week ended Jan. 30. The MBA's seasonally adjusted index of refinancing applications rose 2.5%, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 2.3%. (Reuters)

Europe

· Euro Zone Christmas Shopping Nears Eight-Year High In December. Retail sales in the euro zone were the highest in almost eight years in December as Christmas shoppers splashed out on presents, food and fuel, likely encouraged by falling prices in the bloc. Led by a strong showing in Spain, retail trade volumes rose 2.8% in December compared to the same month in 2013, the best year-on-year growth since March 2007, the EU's statistics office Eurostat said on Wednesday. That was also better than the 2.0% forecast of economists polled by Reuters. On a monthly basis, retail sales rose 0.3%, a slower pace than in November but still slightly more than expected. November sales were also revised upwards. (Reuters)

· ECB Shuts Off Direct Funds To Greece. The European Central Bank heaped pressure on Greece’s new government by restricting access to its direct liquidity lines, citing concerns about the country’s commitment to existing bailout pledges. The decision marks an escalating standoff between Greek politicians and other officials in the euro area. It came hours after new Greek Finance Minister Yanis Varoufakis met ECB President Mario Draghi to garner support for his government’s plans to tear up its 240b-euro ($272b) rescue package and renegotiate the nation’s debt. (Bloomberg)

· UK Services Growth Picks Up In January. The UK's service sector expanded faster than expected in January after a relatively slow pace of growth in December, a survey has suggested. The purchasing managers' index from Markit/CIPS rose to 57.2 in January compared with December's reading of 55.8, which was a 17-month low. A figure above 50 indicates expansion. Markit chief economist Chris Williamson said the survey indicates "a reassuringly robust start to the year for the UK economy". (BBC)

Currencies

· Dollar Rallies Against Euro After ECB Cancels Greek Funding. The dollar on Wednesday rose the most against the euro in nearly two weeks after the European Central Bank abruptly rescinded its acceptance of Greek bonds in return for funding, intensifying concerns about Greece's status. The euro was last down 1.15% against the greenback at $1.13470 after dropping to a session low of $1.13150. The dollar was last up 0.28% against the Swiss franc at 0.92615 franc. The dollar was last down 0.26% against the Japanese yen at 117.275 yen. The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.81% at 94.353 after dropping nearly 1% Tuesday. (Reuters)

Commodities

· Oil Crashes After 4-Day Rally; U.S. Inventory Renews Glut Worry. Oil prices crashed on Wednesday, with U.S. crude losing 9% in one of its biggest daily routs ever, as record high oil inventories in the United States cut short a four-day rally. Benchmark Brent oil fell below the key $55 a barrel mark, after soaring to a one-month high of $59 just a day ago. U.S. crude broke below $48, after Tuesday's peak above $54. (Reuters) · Gold Pares Gains As Oil Prices Tumble. Gold pared gains after rising 1% on Wednesday, losing its safe haven appeal on falling oil prices after the precious metal initially garnished support from China's central bank's move to stimulate its flagging economy. Spot gold rose to a session high of $1,271.80 an ounce and was up 0.5% at $1,265.66 an ounce by 3:15 p.m. EST (2015 GMT), after posting its fourth drop in five sessions, down 1.2%, on Tuesday. Spot silver rose 0.8% to $17.42 an ounce. Palladium gained 0.6% to $786.98 an ounce and platinum was up 0.7% at $1,238.40 an ounce. (Reuters)