German Bloomberg Retail PMI (OCT) (09:00 GMT; 04:00 EST)
Previous:     45.2
Outlook:     --

Outlook: With oil prices still high through the month as well as major companies such as BMW and Metro AG, the world's third largest retailer, cutting profit forecasts, prospects for businesses seem dim.  Bloomberg's retail purchasing managers index surveys over 500 managers on their sentiments for the month and is the precursor to official retail sales figures.  Last month, managers who saw prospects worsening outnumbered those with an optimistic outlook - the figures look little changed for October's release.  Coming up to the vital holiday shopping season, there has been little improvement in the political situation and consumers' budgets are still being stretched.  Both of these factors may weigh heavily on minds and wallets as consumer confidence and spending will be directly affected by any positive or negative data until the season rolls around.  The cost of production and materials is still high with employment the remaining cost for employers to cut to salvage revenues.  Things are not looking up for the German retailers.

Previous: German retail sales fell the most in over a year during September as record high oil prices and political uncertainty over the recent election curbed spending.  The PMI survey dropped to 45.2 from 52.7 crossing the expansionary 50 barrier, falling into a contraction and leaving a “significant”  number of retailers pessimistic about future prospects in the near future.  Adding to the pressure were oil prices which remained lofty and offered little relief for consumers in Germany who were already concerned with large layoffs from DaimlerChrysler AG and Siemens AG, post-World War II levels of unemployment, and declining wages.  Also, with talks of a grand coalition underway, initiatives to revive the employment market planned by Christian Democratic Union candidate Angela Merkel are seeming less and less possible, at lease not to the level originally planned.  This is the fourth year that Germany has seen subdued consumer spending forcing the economy to rely on exports for growth.  Consumers are not expected to contribute much in the coming months and surveyed managers are very much worried about sales in the upcoming critical pre-Christmas season.

UK Industrial Production (SEP) (09:30; 04:30)
Previous:     -0.9%
Outlook:      0.7%

Outlook: Industrial production is expected to have gained 0.7 percent in September, although not enough to make up for August's loss.  A gain, however small, is always welcome to the faltering UK manufacturing sector.  Nevertheless, a rise this small is not the significant gain that economists believe will signal a possible recovery in the economies struggle with slowing growth.  With costs of fuel soaring, consumer spending muted, and export prospects shoring, manufacturing continued to suffer leading some officials to push for another rate drop.  Unfortunately, inflation is also spiraling upward and dropping rates would further catalyze this trend.  The Bank of England is in a delicate position as it continues to hold rates after dropping them in August to attempt to jump-start the teetering economy.  With other parts of the economy, such as the housing market, showing small signs of recovery however, the pressure for a drop is lightening and bank officials may hold that manufacturing may just have to stick it out.

Previous:  Factory production in the UK fell unexpectedly in August for the first time in five months, with industrial output sliding 0.9 percent.  The decline was led by slowing domestic consumer demand in many industries.  In light of this, economists are worried about why the UK's industries have not had more success tapping into global demand.  Also, a reduction in output was seen in the oil and gas industry where routine annual maintenance went on for longer than normal.  A major oil field fire in the end of July negatively affected production throughout August.  This fall is likely to have an effect on overall GDP for the third quarter.  Even if a 1 percent rebound after maintenance is completed, growth for the quarter will only be 0.15 percent.  A continual failure of the manufacturing industry to recover sparks views that there should be another interest rate cut however the Bank of England seems to be leaning more towards containing inflation at this time.

Richard Lee is a Currency Strategist at FXCM.