1. Japanese Industrial Production
2. Canadian Manufacturing Shipments
3. US Consumer Price Index
4. US Retail Sales
5. US Industrial Production

Japanese Industrial Production (Aug F) (MoM) (4:30 GMT, 12:30 EDT)
Outlook:  1.2%
Previous:  -1.2%

Outlook: Industrial production rebounded in August, rising 1.2 percent, after a 1.2 percent drop in July.  The Japanese economy is beginning to expand, with household spending growing for the first month in four and unemployment falling.  Subsequently, production is being revved up to meet the rising domestic demand stemming from the recently revived economy.  Export demand is also coming in strong, especially in the electronics sector, which suffered last month, with exports rising the most in almost a year.  This rising demand, which is helping to boost production in turn, is creating even more jobs and causing a rise in wages.  Companies have now also been able to begin investing in expansion of capacity and production.  This cycle of expansion is expected to be seen at least through the next quarter and into the beginning of 2006. 

Previous: Industrial production in July fell 1.2 percent, more than double what economists expected, led by makers of electronics and transportation equipment.  During the month there were declines in retail sales and household spending, hurting demand for production and spawning speculation that Prime Minister Koizumi may not be able to rely on domestic demand to prevent a slowdown in the economy.  International demand also suffered during the month, especially in Japan's two largest trade partners the US and China, due to high energy costs dampening consumer spending.

Canadian Manufacturing Shipments (AUG) (MoM) (12:30 GMT, 08:30 GMT)
Outlook:  0.9%
Previous:  -1.4%

Outlook:  Manufacturing shipments are forecasted to have risen 0.9 percent in August, the largest increase in four years.  Shipments for goods are likely to pick up among rising domestic demand and orders from the U.S.  Consumer spending was strong among Canadians as the economy grew at a healthy pace and the jobless rate rested at all-time lows. Subsequently, for the same period, retail and wholesale sales are expected to have risen 0.6 and 0.4 percent respectively.   Potentially spelling trouble for the actually results however will be exports of manufactured goods.  Orders from abroad will be met with a currency exchange rate issue.  The currency appreciated over 25 percent against the U.S. dollar over the past three years effectively making Canadian goods more expensive.  On the other hand, the trade balance in July rose unexpectedly to $5.82 billion, the largest in almost a year.  Typically, shipments lag exports by a month.

Previous:  Factory shipments unexpectedly slid 0.9 percent to their lowest level in eight months in July breaking expectations of a 0.5 percent rise.  The drop in shipments found its pace primarily from falling orders for automobiles and paper and wood products from Canadian manufacturers.  Orders for autos led the way down consequentially as sales in the U.S. spiked over the same month on increased demand spurred by dealers offering employee discounts.  Nearly half of all shipments are destined for foreign countries.  U.S. dealers decided to burn off excess inventories rather than placing fresh orders to manufacturers in the north.  Paper and wood product orders from the U.S. also found their way off of managers' purchasing lists as local products were cheaper.
 Tariffs placed on Canadian soft wood imports have been a long standing issue for Canada with appeals being made to NAFTA officials. 

US Consumer Price Index (Sept) (MoM) (12:30 GMT, 08:30 EDT)

Headline
Outlook: 0.9%
Previous: 0.5%

ex food and energy
Outlook:  0.2%
Previous: 0.1%

Outlook:  Consumer prices are expected to have risen 0.9 percent from August to September, the biggest rise in 15 years, pulled by surging energy costs after the hurricanes.  Excluding volatile energy and food prices, the index is expected to have rose 0.2 percent, the highest rise since March, versus a 0.1 percent rise in August.  Economists are expecting the rise, due to high energy prices, to begin seeping into other sectors indirectly forcing up all subsequent prices as companies are passing off costs to consumers.  These price increases are signaling to the Fed that higher interest rates will be necessary to keep high inflation from become ingrained in the economy.  Consumer prices for the 12 months ending in September are expected to be higher by 4.3 percent, following the rising trend even more dramatically than previous months.
Again, without oil, the change is not expected to be as severe. In fact it is expected to grow the same as last month at 2.1 percent, the lowest year-over-year rise this year.

Previous:  Driven by soaring energy costs, CPI rose 0.5 percent from July to August and 3.6 percent from August 2004, the biggest gain in four years.  Excluding food and energy however, consumer price inflation was only 0.1 percent month over month and 2.1 percent year over year.
August saw the record surge in oil prices, pushing overall CPI to levels not seen in years.  However, taking the volatile energy component out of the index, inflation was not seen as high as the headline figure.
Feeling the pinch of higher energy costs, it remains evident that businesses have not elected to pass on higher costs.  However, with a continued rise in costs, higher prices to the consumer level may be forthcoming in the near term.

US Retail Sales (SEP) (12:30 GMT, 08:30 EDT)
Outlook   0.5%
Previous  -2.1%

Outlook:  Following August's unexpected 2.1 percent drop in sales, retailer sales are expected to have returned to positive territory last month with forecasted 0.5 percent growth.   Consumers increased their spending over the period as vehicle owners paid more to top off their gas tanks and those affected by the hurricane at the end of August looked to stockpile supplies.  Storm-related buying of edible and emergency goods began in mid-August as the Southern states along the gulf coast prepared for Hurricane Katrina to make land fall.  Going into September, consumers continued the trend in an attempt to help those displaced while another bout of stock piling took place in anticipation of another catastrophic disaster with Hurricane Rita.  By far the most influential factor in the expected rise in sales will come with energy prices.  Crude oil prices hit an all time high $70.85 per barrel on August 30th and the volatile commodity stayed above $60.00 through the remainder of the month.  This led to a jump in the price of gasoline for consumers.  The average price of unleaded for September was $2.90 per gallon.  Looking ahead retail sales are likely to fall again in October as consumers look to cope with higher heating bills and storm-related buying levels out.

Previous:  Retail sales fell 2.1 percent in August, the largest drop in nearly four years.  The unexpected fall in sales came almost exclusively on the back of weakening demand for autos.  Purchases of automobiles surged in July with dealers using employee discounts to attract
potential customers.   A more conclusive measure shows that excluding
autos, sales at retailers actually rose 1.0 percent.  This more stable measure represented stronger buying for gasoline and, towards the end of the month, purchases of supplies in preparation of the hurricane that was looming on the coast.  Gasoline was increasingly becoming a more prominent contributor to the retail sales indicator since oil prices began to push higher in July.  Further extracting sales at service stations pulls the headline retail indicator down to 0.5 percent growth.  Retail sales, which account for nearly half of consumer spending, seems to be in jeopardy however as citizens' tolerance for taking on the mounting cost of energy begins to wane.

US Industrial Production (Sept) (MoM) (13:15 GMT, 09:15 EDT)
Outlook:  -0.4%
Previous:  0.1%

Outlook: After taking a slight blow in August, industrial production is expected to have dropped 0.4 percent in September.  This number reflects all the immediate and much of the lingering impact of both Hurricanes Katrina and Rita.  Hurricane Katrina shut down oil, gas and chemical production completely in the Gulf Coast for days and, despite all the recovery efforts, some production remained halted through the entire month.  Hurricane Rita, although not nearly as severe as the first storm, scared many companies into stopping production and evacuating in the Texas coast area.  Although there was not nearly as much debilitating destruction, these cautionary maneuvers did close down production for a few days.  On top of the effects of the hurricanes, there is also a slowdown in overall production being seen as consumer demand is seen suffering amid oil price surging all over the country.

Previous: Industrial production fell short of expectations in August, rising only by 0.1 percent as Hurricane Katrina disrupted production of oil, gas and chemicals in the Gulf Coast region.  It is estimated that the hurricane shaved 0.3 percentage points off of production for the month.  The August figure, however, actually only caught about 3 days of production disruption from the hurricane.  Nonetheless, during that time, virtually all production in the affected areas was halted, pulling the somewhat positive pre-Katrina numbers down.  Automobile and parts production actually rose considerably as manufacturers such as General Motors began to rebuild inventories after summer sales.  Despite the promising numbers that were being released before the hurricane, many factors are signaling that industrial production may be entering a slowdown after its expansion last year.  Pulling the figures down was also a drop in electricity production, after a steep rise in June and July on a record hot summer.

Richard Lee is a Currency Strategist at FXCM.