1. Eurozone Consumer Price Index
2. Canadian International Securities Transactions
3. U.S. Housing Starts
4. U.S. Philadelphia Fed
5. New Zealand Retail Sales

Eurozone Consumer Price Index (DEC) (10:00 GMT, 5:00 EST)
Consensus:     0.3%
Previous:      -0.3%

Outlook: Estimates for tomorrow's Eurozone CPI announcement suggest a turnaround from the downward trend in recent months. December is expected to report an increase in CPI by 0.3 percent, according to analysts' consensus. It is likely that the rise to $64 bbl for crude oil by the end of the month began to once again disseminate into the market by further increasing consumer prices for goods.  A rise in household consumption of 0.3 percent over the quarter could also have spurred inflationary pressures on goods, with companies more confident in passing on costs from raw materials on consumers. With concerns over October and November's price growth, a 0.3 percent increase last month could better provide scope for the Trichet and the ECB to consider another rate hike at the February 2nd meeting. However, If expectations are met for the annual pace of CPI, growth will actually fall to 2.2 percent, bringing the read closer to the Euro zone's target 2.0 percent and leaving a rate hike less necessary.

Previous: In November, prices for consumer goods in the Eurozone fell 0.3 percent, curbing its year over year increase to 2.3 percent. Energy prices were probably the main driver behind the decline, after they dropped nearly 3 percent for the month. In fact; Core inflation, which excludes volatile energy products, was actually unchanged at 1.4 percent.   Apart from energy, the industries which made the greatest contribution to the decline in the core index were transportation and recreation. Transportation prices eased 1.6 percent for the month, partially due to the cheaper cost of jet fuel. Recreation prices fell 0.6 percent over the same period. The overall decline in prices for the month left some economists and analysts confident that the Fed will turn dovish sooner than previously thought. 

Canada International Securities Transactions (NOV) (13:30 GMT, 8:30 EST)
Consensus:     C$3.0
Previous:       C$3.8

Outlook:  Tomorrow's report on November net securities transactions is expected to reflect weakening demand for Canadian assets.  The appeal of Canadian equities likely heated up for the month as the benchmark TSX/S&P composite index rebounded off of October lows and retested five-year highs.  Commodity-based stocks were especially strong, with gold and petroleum producers taking the lead for the month. Debt assets are likely to have been the draw on the net transaction figure after inflation figures fell for the second month in November, which likely cooled speculation of rate hikes further resulting in easing demand for Canadian bonds and treasuries.  Overnight lending rates were pinned at 3.00 percent at the time, a full 100 basis points less than US rates.  Corporate bonds' yields simply have a premium over this fed fund rate, so were likely shunned in kind.  Already, bankers' acceptance futures have fallen 1.5 basis points to 3.84 percent.  If foreign investment in Canadian assets fell for the month, there is likely to be a subsequent sell off in the Canadian currency as the country looses some of its strong capital inflows.

Previous: As expected, net foreign investment contracted from $4.75 billion in September to $3.804 billion in October.  Although stock holdings did not fair well, bond purchases increased in anticipation that the Bank of Canada would raise interest rates for the second time after taking a hawkish stance the month before.  What was the beginning of a string of rate hikes from the BoC, the narrowing interest rate gap with America made initial strides in attracting some investors away from US assets.  However, as the Fed Reserve remains on its track of interest rate hikes, there will continue to be a draw on Canada's debt assets.

US Housing Starts (DEC) (13:30 GMT, 8:30 EST)
Consensus:     2,050k
Previous:       2,123k

Outlook:  Builders are expected to have broken ground on 2.050 million homes in December, a slight contraction from the previous 2.123 million recorded last month.  The eagerly awaited barometer will help shed some light on the US housing market, which many economists are saying is overdue for a correction.  After completing their best year in nearly three decades, builders may have been a bit more cautious this month as mortgage rates continue to rise.  A report by Merrill Lynch in August indicated that the housing market accounted for roughly half of total growth in the United States over the last five years - and more than half of the private payroll jobs.  If the market does indeed cool off as many anticipate, its effects may be profound on the US economy.  With the Fed indicating that interest rate hikes are coming to an end, a slowing housing market would only add more pressure on the dollar - which is already facing troubles from the looming trade deficit.  However, if the market prevails, the greenback may see some strength as the economy continues to expand at a rapid growth rate.  

Previous:  Housing starts rose unexpectedly in the month of November, with builders breaking ground on 2.123 million homes.  The 5.3% gain from October was the largest in seven months, handily beating expectations of a decline to 2.020 million.  Three of the four geographical regions gained on the month, with the West printing the highest figure in 27-years.  The housing market remains a hot economic debate these days, with analysts looking for any kind of sign that the decade-long rally is beginning to cool.  Despite an increase in mortgage rates, investors have been more than willing to take on the capital risk of building a home.  If that trend fails to continue in 2006, the US economy may lose some of its steam - causing the value of the dollar to slowly depreciate.

US Philadelphia Federal Index (JAN) (17:00 GMT, 12:00 EST)
Consensus:      14.0
Previous:         12.6

Outlook:  The Philadelphia Federal Index is expected to increase to 14.0 in January, slightly above the 12.6 reading last month.  The Index is a barometer used to measure regional manufacturing growth, and a reading above zero is considered to be bullish.  The manufacturing industry has shown considerable strength lately, with orders resulting from the rebuilding effort along the Gulf Coast being the primary driver.  Yesterday's report on industrial production, which showed a 0.6% increase in December, lends further evidence to the sector's strength.  An increase in new factory orders and construction spending may trigger some inflationary pressures in the US, leaving the Federal Reserve to consider raising interest rates later this year.  If rates continue to rise, the dollar will become much more attractive relative to other currencies with lower yields.  This type of speculation would help to prop the dollar against a massive trade deficit that currently threatens the value of the US currency.  

Previous:  Manufacturing activity expanded quickly in the month of December, with the Philadelphia Federal Index printing a slight increase to 12.6.  As readings above zero indicate growth, the fall in energy prices and investments in new equipment helped propel the manufacturing industry last month.  The Hurricane Katrina rebuilding phase has led to a sector-wide expansion, which is anticipated to help fuel the US economy into the coming year.  Bullish news from the manufacturing industry may give a boost to the dollar, as traders begin to anticipate further rate hikes from the Federal Reserve.  Furthermore, a narrowing interest rate differential with countries such as England and Australia are likely to attract foreign investors to the greenback.

New Zealand Retail Sales (MoM) (NOV) (21:45 GMT, 16:45 EST)
Consensus:      0.4%
Previous:       -0.2%

Outlook:  With gas prices falling 4.3 percent in November along with declining import prices, New Zealanders are likely to have increased spending on retail products for the month.  Contributing to nearly 60 percent of the $97 billion economy, consumer spending has lagged over the past months detracting from inflation and leading to speculation that Reserve Bank Governor Alan Bollard will consider rate cuts.  Bollard has remained on a hawkish path with an interest rate hike in December in an attempt to stem household spending which has been persistent as consumers continue to lend against their homes.  Currently, the annual inflation rate is above the central bank's 3.0 percent tolerance level.  A rise in retail sales in November could prove Bollard's efforts have not had their intended effects.  If the indicator posts as expected, it could put an end to speculation that rate cuts are on the horizon that has driven the kiwi to drop the most in three weeks.  Nevertheless, foreign investors are likely to continue to take advantage of the 7.25 percent overnight lending rate while they can, which would help keep the New Zealand dollar afloat.

Previous:  For the second consecutive month, retail sales unexpectedly dropped in October following a 0.7 percent drop in September.  Meanwhile, core retail sales remained steady at 1.1 percent.  While record high interest rates seem to have effected spending they have also had the undesirable effect of falling consumer and business confidence.  The fall in retail sales induced a tumbling effect in the kiwi falling from 70.73 US cents to 70.49 cents just before the news was released.  Retail sales, often associated with consumer spending will be closely monitored in the coming months to help the New Zealand central bank decide when its aggressive policy has finally produced its anticipated effect.

Richard Lee is a Currency Strategist at FXCM.