1. Japanese Overall Household Spending
2. ZEW Survey Germany (Econ. Sentiment)
3. U.S. Wholesale Inventories
4. French Industrial Production
5. UK Nationwide Consumer Confidence

Japanese Overall Household Spending (NOV) (5:00 GMT, 0:00 EST)
Consensus:     0.4%
Previous:      -0.1%

Outlook:  Japanese Household Spending is expected to increase by 0.4 percent in November, which would mark the first increase since August.  The last two month's of data came in negative, resulting in speculation that purchasing power may not be strengthening as much as anticipated.  With many traders looking for a sign that Japan is emerging from a prolonged period of deflation, November's expected increase may serve as evidence.  However, a report on December 27th indicated that household spending by salaried workers dropped 0.7 percent in November, and the unemployment rate unexpectedly rose to 4.6 percent.  These two pieces of sour economic data go against the Central Bank's expectations that deflation will end in 2006.  Regardless, the report at 5:00 GMT tomorrow will be watched very closely, as an increase in spending may lead the Bank of Japan to ponder its first interest rate hike in nearly 7-years.

Previous:  Overall Household Spending in Japan decreased by 0.1 percent in October, a small increase from the 0.4 percent loss reported in September.  Spending has been somewhat lackluster for the last two months, a sharp contrast from the 4.8 percent surge that was seen in August.  It seems as though Japanese consumers have been hesitant to open their wallets, and policy makers are beginning to wonder if Japan is actually emerging from a 7-year period of deflation.  If overall spending continues to be dull, consumer prices are likely to fall and deflationary pressures will persist.  However, if spending starts to pick up in the next few months, pricing power by suppliers may ensue which would lead to a rise in inflation.  The Bank of Japan has publicly announced that they will consider raising interest rates in 2006, but only after two consecutive months of positive inflationary data.

ZEW Survey Germany (Econ. Sentiment) (JAN) (10:00 GMT, 5:00 EST)
Consensus:    n/a
Previous:       61.6

Outlook:  After the ZEW jumping 22.9 percent in December, it is expected to extend its rise for January.  The ZEW survey compiles participants' feelings on their outlook on the economy concerning inflation rates, interest rates, stock markets, oil prices and exchange rates in the Eurozone, Germany, Japan, United States, United Kingdom, France and Italy.  With consumer confidence climbing to 3.8 in December, 0.4 higher than November's numbers, shoppers are more inclined to increase spending which would further boost Germany's economy.  Germany has seen market improvement in many of its latest economic data releases, along with rising consumer confidence, the unemployment rate dropped to a record 11.2 percent from 11.4 percent, and industrial orders were up 1.7 percent in November.  Furthermore, the Ifo institute suggests Germany's economic growth to be between 1.5 to 2 percent in 2006, possibly higher.  If this is the case, Germany's dominance in the Eurozone will increase and potentially achieve stronger growth than Britain.  Compared to other Eurozone countries, Germany has demonstrated its potential by overcoming high unemployment, large federal deficit and little growth.  If the ZEW should come out once again higher than expected, this may indicate German consumers are beginning to pick up the slack left by exports and could further help to encourage another rate hike from the ECB.  It is anticipated that the German economy will increase growth of 1.2 percent to between 1.5 and 1.8 percent in January. 

Previous: The recent slew of positive data has come to a surprise to many officials.  Just in October, German administration had lowered their GDP growth forecast to 1.2 percent from 1.6 percent after oil prices continued to rise.  Nevertheless, consumers remained optimistic as German's ZEW Survey made an impressive increase to 61.6 points in December from 38.7 in November well above the historical average of 34.5 points.  The psychological impact serves to only improve Germany's willingness to invest domestically.  Helped by after-Christmas sales, the notoriously sluggish retail sector improved by 2.3 percent.  Furthermore, helped by the Euro's 13 percent decline against the US dollar this year, German exports were up nearly 7 percent over 2005.  Looking ahead, exports will continue to make a marked contribution to Germany's economic growth. 

U.S Wholesale Inventories (Nov) (15:00 GMT; 10:00 EST)
Consensus:     0.4%
Previous:        0.2%

Outlook: Inventories are expected to increase by 0.40 percent according to a market consensus for November.  This would mark a strong turnaround in inventory levels from October's result of a 0.20 percent increase. October's result showed that consumer demand was exceeding production supply leading to dwindling inventories. The 0.40 percent increase in inventories for November represents an expectation that companies are making a shift to rebuild their inventories, in efforts to meet growing demand. If inventories come in lower then expected on Tuesday it will be an indicator that the US economy is growing at a faster rate then inventories are able to sustain.

Previous: Wholesale inventories in the U.S gained only .2 percent in October under-achieving expectations. Durable goods increased by .9 percent from September, while non-durable goods actually decreased by 1.1 percent. Drug inventories also were down by a significant 3.1 percent for the month. Automotive inventories marked the greatest increase as they rose by 1.9 percent in from September. Total inventories of merchant wholesalers were estimated at $357.0 billion by month's end. Sales in October reportedly increased by 1.2 percent, exceeding the increase in inventories. Inventory to sales ratio was at a record low in October at only 1.13. It appears that manufacturing is increasing slowly relative to public demand, and while sales are increasing, inventories are lagging behind. The low inventory to sales ratio suggests that companies may be increasing production in order to meet growing demand. It is likely that businesses are at less then desired inventory levels and will try to rebuild their stockpiles in coming months.

French Industrial Production (NOV) (7:45 GMT, 2:45 EST)
Consensus:      2.1%
Previous:        -2.5%

Outlook:  Industrial Production in France is widely expected to have picked up in November, rising 2.1% from October's fall of 2.5%.  Last month's unexpected drop was the lowest reading in more than six years, and analysts are predicting a sharp turnaround for the Eurozone's third largest economy.  Lending further proof to the anticipated rise is the France PMI (reported this morning), which increased to 51.5 from the previous month's 49.7.  A reading above 50 indicates expansion within the industry, and this could very well be accommodated by an increase in production.  While many people are concerned with the current economic situation facing France - most notably the recent surge in imports and nearly a 10% jobless rate - we believe that the current estimates seem plausible.  Traders abroad will be widely anticipating the data, as industrial production accounts for roughly 17% of GDP.  If industrial production does indeed show some strength this month, the ECB will be faced with the daunting task as to whether or not they should raise interest rates from 2.25% to 2.50% in the first quarter of 2006.

Previous:  France Industrial Production unexpectedly fell by the largest amount since 1999, coming in at -2.5% vs. the 0.2% expected.  Led by slumping car sales, the report indicates that the third largest economy in the Eurozone may be losing some steam.  Factories, utilities and mines cut production significantly as an increase in imports continued to penalize French products.  In addition to this, many companies in France are struggling with slower consumer spending, a direct result of the unemployment rate slowly approaching the 10% mark.  International competition from Asian rivals Toyota and Nissan are also threatening France's auto industry, which accounts for nearly 6% of industrial production - and has plunged almost 8.3% this year.  Monetary policy makers are looking for any signs that inflation may be creeping into the economy, so October's report most likely helped quell those immediate fears.  However, should industrial production show signs of strength in the coming months, the ECB may have to consider raising its current benchmark interest rate of 2.25% to help curb inflation. 

UK Nationwide Consumer Confidence (DEC) (0:01 GMT, 19:01 EST)
Consensus:    n/a
Previous:     101

Outlook: Despite the 9-point gain from November's Nationwide Consumer Confidence reading, consumer confidence remains contradictory to other economic data.  The housing market has shown signs of rebounding while retail sales have grown after Christmas.  Continuous increases in oil prices have also slowed.  Nonetheless, the boost in consumer sentiment may be a result of a stabilizing economy, as employment remains strong, fears over petrol prices fade, and there is noticeable stable earnings growth and interest rates.  Moreover, though sales have increased, there has not been prevalent credit card usage.  Credit loans were down 63 percent from November and 77 percent from the previous year further suggesting weakness ahead.  GfK NOP's UK Consumer Confidence Survey also showed a 1-point drop to -9, the lowest throughout 2005.  While data on Britain spenders remain mixed, investors wait for the January 11 central bank meeting for in an indication of what the Bank of England might do next with interest rates.  There have been signs of a rise in bets of interest-rate futures that the central bank will indeed reduce rates if growth does not pick up.  If this is the case, this may provide fuel for much needed boost in consumer spending.

Previous:  After 3 consecutive months of decline in UK's Nationwide Consumer Confidence index, from the lowest reading ever to a bump of 9 points in November to 101 from 92, the index remains close to its long term average of 102.  Consumers were seemingly more comfortable with the economy and not necessarily more confident.  Furthermore, Brown slashed his growth forecast by a half to 1.75 percent, the slowest pace since 1992.  Cutting rates in December by 25 basis points, the Bank of England attempted to attract consumers to spend.  However, further interest rate drops may be necessary in the future for Britain to induce spending in their favor.

Richard Lee is a Currency Strategist at FXCM.