• UK Claimant Count Rate
• Canada Consumer Price Index
• Canada Manufacturing Shipments
• US Consumer Price Index
• US Net Foreign Security Purchases

UK Claimant Count Rate (DEC) (9:30 GMT, 4:30 EST)
Consensus: 2.9%
Previous: 2.9%

Outlook: For the month of December, the percentage of the labor force claiming unemployment related benefits is expected to remain at the 2.9. Furthermore, England's unemployment rate measured by the International Labour Organization is likely to have stayed the second to lowest of the Group of Seven industrialized countries at 4.9 percent. Economists anticipate jobless claims in December to increase by 7,400 for the 11th month. Also, wages and bonuses are expected to stay at 3.9 percent. Weak employment statistics is the general consensus across the board. However, if England wants to emerge out of its slowing economy, it must take action to stimulate consumer consumption. A distinct trend in economic data has yet to develop which has reassured the Bank of England's choice of keeping its 4.5 percent interest rate until further notice.

Previous: November marked the 10th consecutive gain in England's jobless claims. Forecast to only rise by 8,000, the number of claims increased surprisingly by 10,500 since October. With 2005's surging oil prices putting burden on producers, the second largest economy in Europe has been pushed to its slowest rate of expansion since 1992. Growing unemployment has suggested that England's recent economic slowdown is finally showing its effects in the labor market. Judging from the latest set of UK PMI surveys, the employment situation is likely to stay sluggish for a while. Of the three areas, only the service sector reported a slightly higher employment index for December while manufacturing and construction both saw lower figures.

Canada Consumer Price Index (MoM) (DEC) (13:30 GMT, 8:30 EST)
Consensus: 0.1%
Previous: -0.2%

Outlook: The still strong economy's slow response to recent monetary tightening probably nudged Canada's consumer price index higher for December. Companies have been working at full capacity and yet, over 50 percent of executives recently polled by the Bank of Canada still stated that their companies would have trouble meeting any increase in consumer demand. The underlying problem of excess demand is to drive consumer prices forward despite tame energy prices. In order to curb inflationary pressures, it is probable that the Bank of Canada will raise interest rates by 25 basis points during their next meeting on January 24, a day after the upcoming federal election. Currently, Canada's overnight lending rate is at 3.25 percent, comparable to the US lending rate at 4.25 percent.. Furthermore, economists expect Canada's central bank to increase rates to 3.75 by March to contain inflation at a neutral level while the US Fed is likely to slow the number of interest rate hikes. The narrowing of the interest differential will probably cause loonie bullishness in the next few months.

Previous: For the second consecutive month, Canada's CPI fell -0.2 percent, the smallest increase in four months. An 11 percent fall in gasoline prices along with overall diminishing energy prices slowed annual inflation down to 2 percent in November from a recent high of 3.4 percent in September. However, the energy-related slowing incremental CPI increases are not enough confirmation that the Bank of Canada's interest rate increases have properly slowed the economy to a point of price stability. Domestic demand is still going strong and it was evident that the economy was beginning to work at full capacity in November. As a result, this creates pressure and tightness in the economy, showing signs of more inflation and rate hikes to come.

Canada Manufacturing Shipments (MoM) (NOV) (13:30 GMT, 8:30 EST)
Consensus: 0.5%
Previous: 0.9%

Outlook: Analysts are expecting a second consecutive monthly gain in Canada's manufacturing shipments, this time by 0.5 percent. It is likely that vehicle shipments will play the major role in determining tomorrow's report. October's 7.6 percent gain in vehicle shipments was the major factor of last month's overall gain of 0.9 percent in total manufacturing shipments. It is likely that this month will post similar results as the recovery in vehicle shipments continues following the post-summer drawback. However petroleum, an extract of crude oil, could see a slight decline in shipments, as petroleum shipment values probably declined.

Previous: October's manufacturing shipments increased by 0.9 percent in Canada. This sharp contrast to September's 0.3 percent decline brought Canada's total manufacturing shipments to $52 billion. This increase was probably spearheaded by sharp October gains in motor vehicle manufacturing. After September's loss of 7.3 percent on vehicle shipments, the vehicle industry rebounded in October with a rise in shipments of 7.6 percent. The sudden surge was probably due to the production of 2006 model vehicles which launched in October. However excluding vehicles it is estimated that October would have posted no increase from September. Machinery manufacturers posted a strong gain in shipments of 2.8 percent, bringing the total to $2.7 billion. Also, shipments of chemical products rose 2.2 percent to $4.2 billion, marking the third month of gains in this area. The drop in petroleum, however, was enough to negate these gains. A 3.2 percent drop in petroleum prices in October brought petroleum and coal shipments down by 2.4 percent from record levels of $5.2 billion in September. Since last October, Canada's total shipments have increased by 3.4 percent.

US Consumer Price Index (DEC) (13:30 GMT, 8:30 EST)
Consensus: 0.2% (MoM), 3.6% (YoY)
Previous: -0.6% (MoM), 3.5% (YoY)

Outlook: December's consumer price inflation is expected to be 0.2 percent, rebounding from a -0.6 percent figure reported for November. Last month's decline was the largest seen since July of 1949 and was a direct result of falling energy prices. Core inflation, which excludes the volatile food and energy components, is expected to remain tame at 0.2 percent in December. However, the fact that the Producer Price Index came in with an increase of 0.9 percent last week, much higher than the 0.4 percent expected, alludes to possible upside risk to tomorrow's report. Given the reawakening of energy prices in December, it would be logical for CPI to increase by at least 0.2 percent. As the growing consensus that Fed tightening cycle is ending has been around for some time now, it would take a fairly hefty surprise in tomorrow's figure to bring doubt into the market.

Previous: Consumer prices fell significantly in November, dropping an unexpected 0.6 percent, the largest monthly decline since July of 1949. Unsurprisingly, this fall was brought on mostly by falling prices for energy and the related service of transportation. Excluding food and energy, core inflation was 0.2 percent for the month, directly in line with expectations. This measure has been wavering for the past few reports and despite the forthcoming end to the Fed's tightening cycle, core consumer price inflation is only slightly lower than February 2005's 26-month high of 2.4%. Evidently, the soaring energy prices we experienced several months ago has not yet translated into the anticipated second-round effects of wage increases and higher inflation in prices of other final goods. As energy prices remain fairly calm, even through the colder winter months, the risk of these second-round effects giving the CPI a significant boost are dwindling as well. As such, policymakers will most likely end the tightening cycle soon, as planned.

US Net Foreign Security Purchases (NOV) (14:00 GMT, 9:00 EST)
Consensus: $80.0B
Previous: $106.8B

Outlook: Treasury International Capital statistics are expected to show a robust net inflow of $80 billion in the month of November, bolstered by foreign investors looking for high returns in the world's largest economy. Although a bit lower than the record setting $106.8 billion recorded in October, strong growth and rising interest rates are expected to be the primary factors bringing funds to the US. Last month's report indicated that private investors rather than central banks were the ones plowing money into US holdings, an indication that speculators are still bullish on the economy. The trade deficit, reported earlier last week, narrowed to $64.2 billion from a record setting $68.9 billion in October. In relation to this, investors look to the TIC data for proof that foreign buying of US assets is enough to finance the overwhelming trade deficit. With the Fed finally indicating that the interest rate cycle is soon to end, traders have brought the gloomy trade deficit back to the forefront, and will also be watching the TIC number very closely. If the measure of inflow comes in much less than the $64.2 billion deficit ââ,¬â€œ meaning that the US trade shortfall went underfunded in November ââ,¬â€œ the greenback is likely to suffer a dramatic blow.

Previous: International investors increased their net holdings of US assets by a record $106.8 billion in October, nearly double the $54.4 billion monthly average for the last five years. Instruments measured under the Treasury International Capital system consist of net holdings of Treasury notes, corporate bonds, stocks and other financial assets. Foreign buying of these very instruments handily serviced the $68.9 billion trade deficit in October, and helped quell any fears that faith in the United States economy was waning. Caribbean banking centers ââ,¬â€œ or offshore hedge fund accounts ââ,¬â€œ increased their holdings of US debt by a net $10.6 billion, which was the largest of any country or specific group. Second on the list was the Organization of Petroleum Exporting Countries, who have been increasing their holdings steadily with recycled petrodollars. Analysts believe that the recent surge of capital inflow is primarily being fueled by solid growth and relatively low inflation. As the United States continues to run consistently high trade deficits, the reliance on foreign investment remains a top priority for the overall health of the economy.

Richard Lee is a Currency Strategist at FXCM.