and shrinkage in global growth that is set to fall to recessionary levels driven by major economies.

The start is rather with light fundamentals today yet this week is busy and full of major market movers, all the way from Tokyo to New York as the situation on hand is to be cleared from data all across vital sectors of the economy with rate decisions queued and jobs report to be seen!

Today kicking off the week is to be UK's Construction PMI as expectations for the sector in December that is has continued the deceleration especially as the economy sank deeper in recession and the housing market's performance along side liquidity remained subdued which added further downside pressures upon the sector. Median estimates are expecting a deepening contraction to 30.5 from 31.8 which means further spending and participation from the sector as well as further jobs loss that adds to the ongoing woes in UK as already unemployment hit 6.0 percent at the fastest pace since 1999!

This week is critical for the UK economy as the Bank of England's MPC is to round the table to deliberate the actions needed to be taken to address the continued weakening in their economy that shrank in recession. Their most dominant fear as always is threats of deflation and undershooting the medium term target, as King explicitly expressed his fears by acknowledging that he might address the Chancellor after inflation falls below 1.0 percent!

Expectations are ranging for another 50 bp yet the economy is calling for another total percentage point cut to halve the rates to 1.0% which would be the lowest in nearly 300 years for UK expressing how deep of a situation the BoE are in!

This week producer prices along side properties prices are to record further falls ahead of key consumer prices which is the focal concern, adding to that UK's services sector which accounts for 3/4 of the economy is expected to continue shrinking along side its peers from the EU and the US driven by low households income and spending especially on entertainment and luxury and as well not forgetting the dilemma the financial sector continues to live in.

For the EU the dominant highlight is to be the Eurostat CPI flash estimate that proves the fears of deflation which the ECB denies as a threat, it is expected to fall into the comfort zone well at 1.8 percent which is a radical transformation from less that six months ago when it hit a 16-year high.

That by itself is raising the calls on the ECB and among its members to actually continue the path of aggressive easing which Trichet hinted might be delayed, yet still price stability is the mandate for the European Central Bank and surely they will be assessing the conditions closely especially that their meeting is delayed this month after the holidays.

The GDP in the third quarter is to be finalized for the EU this week and expected steady at 0.2% contraction, driven by Germany which is not of concern anymore as we know the area is already in recession and in the fourth quarter it yet has taken another drastic turn south, driven by the major economies degradation from Germany, Italy, Spain and France as well.

No rate decision for the ECB this week yet the zone is on a role with heavy fundamentals queued for release.

Moving on to the world's largest economy which its highlight to be the closing of this hectic week as America officially announces the total jobs lost in the last abysmal year of 2008 as December's jobs report is to be revealed and expectations are so far are for the unemployment rate to race to 7.0 percent with more than 400 thousand jobs lost during the so called jolly month of the year!

Still the American administration is walking the path to deliver all means possible to shorten the recession and stem its depth, and as we approach the awaited 20th of the month, the day the new administration is officially sworn in, the stimulus Obama promised is supposedly to be announced and delivered.

His aids said that he is asking of nearly 40% of the stimulus worth tax breaks for businesses and consumers some major component that is to ease the resistance it might face from the seated Republicans that might block much of his efforts, though it is needed and crucial at this stage to salvage the economy! So far the projections are for $775 billion package that nearly $300 billion of which are to be worth tax cuts.

The markets have still managed to start the year with optimism over the steps taken and those to be announced especially those that we have started the week with from the United States. Stocks have gained and so did oil that is still taking a jittery ride as OPEC started the new reduced quota and the escalating tension by the second in the Middle East is still lingering in the back on investors minds that might in a way or another affect supplies of crude especially to the world's largest consumer; yet doubted that the Arabian suppliers in the curtail will address political pressures by utilizing the oil weapon for if that was a tabled option Iran would have taken the lead yet seemingly it is not part of the dialogue...

Be prepared for this hectic week dear reader as January is to play a major role in shaping the start of the year and the performance of the first quarter of 2009!