1. U.K. Retail Sales
2. Euro-Zone Trade Balance
3. Philadelphia Federal Reserve Bank Survey
4. Japanese Tertiary Industry Index

U.K. Retail Sales (MoM) (SEP) (08:30 GMT, 04:30 EDT)
Consensus: 0.3%
Previous: 0.0%

Outlook: British retailers are expected to have increased sales 0.3 percent in September following a stagnant period in August.  After dropping 0.6 percent in July and remaining unchanged in August, even the relatively small forecasted gain will offer some relief from recently volatile data, especially with the Christmas shopping season approaching.  Other than an expected jump in the sales of women's clothing as the fall season approached; many other goods' classes are believed to have fallen behind, despite promotions.   Two other sales indicators for the month offer mixed indications of where sales will head.  The Confederation of British Industry's distributive trade survey dropped to a the lowest level since it began tracking it 22 year s ago, while the British Retail Consortium showed same store sales fell yet total sales rose for the fifth month standing.  A few important factors are weighing on consumers spending habits at retailers.  High energy prices continue to bleed citizens' wallets while strong inflation, ticking higher unemployment and a sluggish economy further disintegrate confidence.   The measure of nationwide consumer confidence fell to a low in September to 94 on theses factors.  Moreover, a disappointing retail sales number could lend itself to a further monetary policy shift.  According to the Bank of England's minutes from its last meeting, the Monetary Policy Committee said sales growth may have passed its low point; so a further move lower may justify  further policy easing at the next rate decision meeting in November

Previous: Retail sales in August stayed after dropping a greater than expected 0.6 percent in July.  The concensus among economists was for sales to rise by 0.3 percent for the month.  Consumers reduced their trips to retail stores as record oil prices both reduced disposable incomes while also helping to push inflation to an eight year high of 2.4 percent in August.  This combination of  squeezing household spending and dimming the outlook of goods affordability could put Great Britain's growth, which has outpaced that of the Euro nations for the past five years, if jeopardy.  Subsequently during the period, the housing market continued to plateau, having its smallest gain in 9 years while at the same time debt burdens on consumers continued to increase,  further stifling consumer spending.  This drop in consumer spending has forced many retailers to close some stores and scale back operations. 

Euro-Zone Trade Balance (AUG) (09:00 GMT, 05:00 EDT)
Consensus: 2.2B
Previous: 7.2B

Outlook: For the month of August, the Euro-Zone trade balance is expected to have fallen the most since the beginning of the year to 2.2 billion euros.  Anticipation of such a tumble is based on import and export trends that have been in effect since the first half of the year.  In the first six months of this year, energy imports in the Euro-Zone have been steadily increasing.  Given that crude oil prices hit their highs towards the end of August, it is likely that energy imports will place heavy negative weight on the trade balance.  Machinery and vehicle exports, which have traditionally lent heavily to positive reads in the balance, are not expected to have been able to counterbalance the damage energy imports likely caused over the period.  For the first half of this year, Germany's trade surplus has contributed the most to the Euro-Zones overall surplus.  However, inflation in Germany has soared to its highest point since September 2001, further supporting the argument that increasing oil prices will cause a drop in the Euro-Zone trade balance. 

Previous: The Euro-Zone trade surplus came in at 7.2 billion euros in July, higher than the expected figure of 6.5 billion.  Trade with non-EU25 countries accounted for this surplus as trade within the EU25 registered a deficit of 3.2 billion.  Although the surplus was higher than expected for the month, it was not anywhere near the 12.9 billion Euro surplus at the same time a year ago.  The trend of a decreasing surplus from year-to-year figures has much to do with increasing energy imports.  Much of the energy consumed in the Euro-Zone comes from Russia, which has caused external import figures to spike as Russia is not included in the Euro-Zone.  On the other hand, Russian, in addition to Indian imports of Euro-Zone goods, has been on a dramatic rise, keeping European trade from entering a deficit. 

Philadelphia Federal Reserve Bank Survey (OCT) (16:00 GMT, 14:00 EDT)
Consensus: 10
Previous: 2.2

Outlook: The Philadelphia Federal Reserve Bank's broadest measure of manufacturing activity, the diffusion index, is expected to register at 10 for the month of October, indicating increased manufacturing growth in the region from the previous month.  The positive outlook for October's survey is largely deduced from both September's report and a rebound in orders following Hurricane Katrina.  In the previous survey, 25 percent of the surveyed firms expressed that they expected employment to increase in the next six months, suggesting increased business activity.  Additionally, a question was included in September's survey assessing the impact of surging oil prices on production.  The majority of firms felt that increasing oil prices would only have a slightly negative effect on future production.  Given such optimistic sentiment, it is likely that manufacturing growth in the Philadelphia region picked up growth in October. 

Previous: The diffusion index of the Philadelphia Fed's survey fell to 2.2 in September, the lowest level in three months.  In the previous month, 36 percent of the surveyed firms reported an increase in business, whereas only 24 percent reported an increase in September.  The lag in manufacturing activity was reflected in the employment portion of the survey, where nearly as many firms reported a decrease in employment as those that reported increased employment.  Higher production costs had much to do with the weak employment as 57 percent of firms reported higher import prices.  The lack of manufacturing growth is in line with meager demand as evidenced by the drop in new and unfilled orders. 

Japanese Tertiary Industry Index (MoM) (Aug) (23:50 GMT, 19:50 EDT)
Consensus: 0.9%
Previous: -0.8%

Outlook: Spending on services in Japan, measured by the tertiary industry index, is expected to have risen by 0.9 percent in August after dropping off in July.  A posting consistent with forecasts would lend to the belief that the Japanese economy continued to recover in August.  Indicators that potentially lend themselves to the optimistic consensus for the tertiary index were consumer confidence and retail sales over the period.  The consumer sentiment index for the August climbed to its highest level in a year while nationwide retail sales climbed by 1.5 percent.  This optimism among consumers and jump in the retail sector will likely spill over to the services industry as well.  Japanese desire to spend has been massaged by companies raising bonuses and replacing part-time employees with higher paid full-time workers.  The equities market also did very well for the month adding to the average consumer's confidence in Japan's future and further encouraging Japanese to spend more.

Previous:  Japan's tertiary index marked its fourth decline in seven months in July, falling 0.8 percent.  This reading has sparked speculation that the economy is not on track to recovering as quickly as many originally thought or as quickly as the government has claimed.  This index is very closely watched as more than half of the Japanese workforce is employed in the service sector and spending in this sector has close ties to changes in income and consumer confidence. Spending fell in July in 8 of the 11 sectors but did rise in education, health care, and finance and insurance.  Officials did detail that spending in July is usually weaker than June due to cold weather from the typhoon season.

Richard Lee is a Currency Strategist at FXCM.