Australian Retail Sales (MoM) (SEP) (00:30 GMT, 19:30 EST)
Outlook: -0.1%
Previous: 0.6%

Outlook:  Record gasoline prices may have finally taken their toll on Australian consumers in September.  Retail sales for the month are expected to have fallen 0.1 percent as consumers begin to watch their tightening budgets.  Consumer confidence during the month plummeted 13.3 percent to the lowest in over 2 years.  Losses in sales were especially seen in entertainment products such as CDs, books, and small consumer electronics as well as clothing.  Seeing a decline will give strength to expectations that the RBA will stay rates at their next meeting and probably for the rest of the year.  After raising the rate by a quarter point in March to keep spending from pushing up inflation, consumer spending is finally reacting as expected to higher borrowing costs.

Previous: In August, Australian retail sales rose twice as much as expected, by 0.6 percent.  With employment at a 29-year low of 5 percent and wages growing at the fastest pace in eight years, even skyrocketing gasoline prices, which rose 28 percent from the beginning of 2005 to August, were unable to slow this month's consumer spending.  Consumer confidence was at a six-month high and retailers rolled out price incentives to help ease the pressure of high energy prices.  Demand was also strengthened by income tax cuts beginning in July of A$21.7 billion over the next four years.  Car sales gained 1.4 percent, the most in five months, clothing sales by 1.6 percent, and department stores 0.5 percent from July to August. 

German Unemployment Change (MoM) (OCT) (8:55 GMT, 3:55 EST)
Outlook: -18K
Previous: 39K

Outlook: Economists are predicting that German unemployment will have dropped by 18,000 for the month of October after rising 39,000 in September, still staying near post-World War II levels. As usual, a source familiar with the data has said that October's drop is actually closer to 36,000, more than double the median expectation. This drop may be partially due to changing statistics in Germany as the government continues to adjust for new, harsher regulations on unemployment benefits and filings put into effect at the beginning of the year.  Employment prospects have remained dim in the country as many major manufacturers are beginning to transfer jobs abroad to avoid paying the world's second highest hourly wages to its German workers and high oil prices have spurred companies to consider layoffs to cut costs.  Also, even with the November 14 deadline for the formation of the grand coalition approaching, Christian Democratic Union leader Angela Merkel's job creation proposals are still being debated.

Previous: German unemployment unexpectedly rose in September, seasonally adjusted by 39,000 from August to 4.83 million.  Economists actually expected a drop of 12,000, but people who had been removed from the Federal Labor Agency' register at the beginning of 2005 were reclassified as jobseekers during the month of September.  Without this statistical adjustment, unemployment did in fact drop by 22,000.  However some economists comment that this drop is due to subsidized labor - there are merely unemployed people who are no longer included in the statistics.  Coming into the September 18 election, Angela Merkel stated that job creation was her most important issue.  However, the vote was split and the grand coalition may drop a good part of this issue.

Richard Lee is a Currency Strategist at FXCM.