1. UK Producer Price Index
2. New Zealand Retail Sales

U.K. Producer Price Index Output (MoM)(OCT)(9:30 GMT, 4:30 EST)
Consensus:  0.2%
Previous:  0.7%

Outlook:  Producer prices look to rise once again, lending to a four-month stretch sparked by gains in the price of crude oil contracts earlier in the summer months.  However, the 0.2 percent expected figure is comparably lower than the previous 0.7 percent rise, lending to the belief that increases may in fact be slowing.  Crude oil prices have dipped since the $70.85 high set on August 31 but remained lofty in the month of October.  As a result, Bank of England policy makers look to remain attentive on their watch of price increases, continuing to wave away notions of definitive rate cut considerations at the moment.  However, it has been noted that, although somewhat considered a temporary shock to the economy, should energy prices continue further, Mervyn King and his band of central bankers may elect to raise rates in order to curb inflation.  This may ultimately place further pressure on the already weakened domestic demand, further weakening overall growth.

Previous:  Prices paid at the producer level rose for the third consecutive month as higher petroleum and commodity prices added to overall costs.  Factory gate prices increased 0.7 percent in the month of September as crude oil contracts rose 48 percent on an annualized basis.  The higher costs coincided with the front month crude contract hitting an all time high of $70.85 a barrel in New York after Hurricane Katrina ravaged the Gulf Coast and shut refineries in the region down.  As a result, inflation on the consumer level rose on the month by 2.4 percent, boosted by the 3.3 percent annualized producer price figure, the highest in almost eight years.  Now, as a result of higher prices, speculation is mounting that rate cut considerations may be tabled as fears grow of further rises in inflation.  However lending to the contrary, raw material prices used by factories dipped 0.3 percent in the month according to the Statistics Office.  The decline leads some economists and policy makers to believe that the current rate of inflation may be considered a temporary shock to the economy, potentially dissipating with a decline in energy prices. 

New Zealand Retail Sales (MoM)(SEP)(21:45 GMT, 16:45 EST)
Consensus: -0.5%
Previous:  0.2%

Outlook:  Retail sales in the New Zealand economy are expected to dip 0.5 percent in the month of September as promised income tax cuts and bolstered wages ran their course last month.  However, with consumer confidence continually positive, the figure may beat estimates once again, rising rather than falling.  Consumer confidence in the economy bounced back from 2 ½ year lows as fuel prices dipped in the month of October.   Additionally, similar to last month's figure, the continually tight labor market is bolstering wage increases to employees.  With higher amounts of disposable income, further spending is inevitable.  As a result, expectations are once again high that Governor Bollard will raise interest rates to head off inflation, which remains above the central bank's benchmark target.  Following last month's increase, market participants are expecting another 25 basis points to 7.25 percent.

Previous:  Consumption was buoyed in the month of August as higher fuel prices and increasing car sales added to the overall figure.  Retail sales in New Zealand rose unexpectedly by 0.2 percent, according to Statistics New Zealand, as consumers became confident in current economic growth and expansion.  In addition, near record low unemployment levels boosted wage increases to employees as political parties vying in the September 17th election pledged income tax cuts.  As a result, with consumers confidently spending and prices rising, expectations are running high that central bank governor Alan Bollard will elect to raise the overnight cash rate by another 25 basis points to 7 percent in order to contain price increases.  Inflation, currently in the economy, is bragging a 3.4 percent rate in the year ending September 30th.

Richard Lee is a Currency Strategist at FXCM.