1. German Import Price Index
2. Italian Trade Balance
3. Italian Retail Sales

German Import Price Index (August) (MoM) (6:00 GMT, 2:00 EDT)
Consensus: 0.7%
Previous: 0.6%

Outlook:  The import price index is expected to rise in August with expectations set at 0.7%.  Just as import prices had risen in July from higher prices due to oil imports, the same is expected to happen in August being that oil prices rose even more steeply in August than it had the previous month.  Along with this rise, the euro has stayed weak against the dollar not showing much change from start to end of August.  This has caused prices to stay relatively high in Germany.  The prices of metals, especially gold, around the world will also contribute to this rise in prices.

Previous:  German import prices rose 0.6% m/m and rose 4.7% y/y in July.  This is the fastest pace that prices have increased since January 2001 although the growth did fall under expectations of .7 percent, the increase was attributed to a steep rise in the prices of oil imports as well as the ten percent decline in the value of the euro.  Excluding oil however, import prices fell by .1 percent further emphasizing the pressure being faced by the rising price of oil.

Italian Trade Balance (July) (8:00 GMT, 4:00 EDT)
Consensus: 2002.0 M
Previous: -588.0 M

Outlook: Italy's Trade Balance is expected to be EUR2002 Million for the month of July, up from a negative balance of EUR588M in June.  With a positive current account report for July of EUR2765 million and a positive non-EU trade balance in July of EUR502 million (both way above expectations), the overall trade balance should follow suit.  Imports most likely dropped slightly in July due to a weakening economy, however this weakness in the Italian and other European economies, is being offset in global trade by strong US and Chinese demand and the economic recovery in Japan. 

Previous: The value of global imports outweighed Italy's exports in June, where the world trade balance came in at -EUR588 million.  Italy's imports were valued at 26,319 M Euros while the country exported 25,731 M Euros in goods.  Exports of manufactured products were strong with textiles and leather leading the way, as expected.  High prices of crude oil, however, offset these exports almost single handedly.  Coupled with a net deficit in agricultural trade, the import of expensive energy products resulted in a negative trade balance.  The country's export problems are intensified in light of the fact that domestic demand is low, as evidenced by Italy's negative growth in retail sales for the month of June.  Italy's trade statistics within Europe mirrored that of its global trade.  In addition to trade deficits in energy products and agriculture however, the country also took a significant hit on the import of food and tobacco products from other European countries.  Italy's net trade deficit within Europe for the month of June came in at 439.0 M Euros.

Italian Retail Sales (SA) (MoM) (July) (9:00 GMT, 5:00 EDT)
Consensus: .2%
Previous: -.2%

Outlook: Italian retail sales are expected to grow 0.2 percent in the month of July after a drop of the same percentage the month before.  Business and industrial confidence for July is positive.  The Italian economy emerged from a recession in the second quarter with its economy growing at its fastest rate in more than two years.  Unemployment also eased during the month.  This growth is not being seen as heavily by retailers however because of the climb in crude oil prices which is putting heavy pressure on consumer spending.  Italian retailers are warning that sales growth will continue to decline due to lack of consumer confidence and budget restraints.  Although there is growth expected for July, sales are not even expected to be back up to the level seen in the end of May.

Previous: Italian Retail Sales came in at a growth rate of -.2% in June.  The decrease in retail sales was the most recent fall contributing to the steepest annual decline the country has seen in nine years.  Food and furniture and textiles were the only sales areas that had posted a positive gain on the year.  All other retail areas saw a decline, clothing and the shoes and leather sectors leading the way at -1.6% for the year.  High-energy prices have threatened the economy's recovery from a recession in the first quarter.  Confidence has been low and consumers have been left with little extra money to spend in spite of tax cuts due to the high costs of energy. 

Richard Lee is a Currency Strategist at FXCM.