German Producer Prices (MAY) (06:00 GMT; 02:00 EST)
                     (MoM)                    (YoY)
Consensus:     0.3%                      6.4%
Previous:         1.0%                      6.1%

Outlook: Germanâ�,��"�s annual read of producer prices are expected to top last monthâ�,��"�s near twenty-six-year high to rise 6.4 percent and further encourage the ECB to contain inflationary pressures.  Producer prices are taken by a â�,��"family of indexesâ�,� that measures the average change in selling prices received by producers, that is, a brand of price growth determined by the seller.  The hikes in the European refinancing rate since December apparently has yet to slow price growth, as high energy and other commodities continue to boost production costs and firms in turn look to pass the bill onto their customers.  However, with commodity prices correcting last month, the monthly figure is expected to print some contraction from the strong 1.0 percent pace in April.  Since the ECB has yet to be precise on their thoughts since the last meeting, this indicator could be critical in encouraging policy members to retain their hawkish ways. 

Previous:  May gave Germany its highest producer prices increase since June of 1982, pressuring Trichet and the ECB to contemplate higher interest rates.  The 6.1 percent year over year increase trumped the previous monthâ�,��"�s 5.9 percent figure and also the expected easing of pace to 5.8 percent for quite the rude awakening.  Producer prices also rose 1.0 percent on the month, which was the fastest acceleration since January.  The high prices were blamed on energy costs, which had risen 20 percent from a year earlier.  Other key commodities such as lead, zinc and tin were also substantially higher for the large manufacturing sector.  Despite the high costs in raw materials, producers have been able to pass these costs onto willing customers thus far.  This was one of the obvious factors that led the ECB to raise rates earlier this month; inflation had been beyond their limit for over a year and they needed to act before workers started demanding higher wages.         

Japanese Convenience Store Sales (YoY) (MAY) (07:00 GMT; 03:00 EST)
Consensus:                 n/a
Previous:                    -4.9%

Outlook: Retail numbers for Japan have been poor lately, with drops in nearly every release, as Japan struggles with low consumer spending. There are signs that this cycle is coming to an end, as some of the numbers have rebounded somewhat. Sales in Japanese department stores fell by 0.3%, dropping less than the 0.6% expected. Manufacturers also seem to be expecting an increase in demand, as machine orders have increased by 10.8% last month. In addition, unemployment in Japan is at a seven year low, and 0% interest rates have made borrowing costs practically nonexistent. The most significant factor, however, is that oil prices are no longer at their record high and have fallen off fairly substantially since April. These high oil prices, which likely suppressed demand in April in the form of heating and gasoline prices, will likely help demand recover and will probably induce a more positive number in May.  Given consumer spending makes up over 60% of domestic GDP, it is likely to be a crucial factor in the BoJâ�,��"�s decision to finally lift the long-standing zero interest rate policy.
 
Previous:  Sales in Japanese convenience stores fell by 4.9% since the year before, the steepest drop in 18 months. Concerns about domestic demand were compounded by worries that oil prices were stifling the Japanese economy, as prices over $75 a gallon took their toll on the oil-importing nation. Additionally, Japanese officials claimed that the negative numbers in convenience store sales, as well as the sharp decline in other retail indicators, were due to unusually heavy rainstorms suffered by Japan during that month. Strong wage growth, however, is expected to help mitigate the damage though as people have more disposable income to boost confidence and in turn pump more money back into the economy.

Canadian Consumer Price Index (YoY) (MAY) (11:00 GMT; 07:00 EST)
                       (Headline)            (Core)
Consensus:        2.7%                  1.7%
Previous:            2.4%                  1.6%
 
Outlook:  Canadian consumer inflation is expected to rise by 0.3 percent on the month, a decrease from last monthâ�,��"�s number and an indication of mild inflation. The strong Canadian dollar has also helped slow inflation numbers by making imports cheaper, a factor that helped keep the CPI read low in April. Mayâ�,��"�s exchange rate was even stronger than previous monthâ�,��"�s, reaching a new 28-year low, which could help Canadian CPI slow even further.  On the other hand, a number of factors are boosting expectations for the more important core figures to continue plunge ahead, amongst them a drop in the jobless rate to 6.1percebt and a better than expected output figure in the first quarter.  The Bank of Canada has continued to emphasize the importance of reining in inflation, even as it raised interest rates for the seventh consecutive session last month. However, with the BoC indicating that their target annual interest rate is 2 percent, recent moderation in crude and a core figure below the central bankâ�,��"�s target will slowly chip away at conviction behind continual rate hikes.

Previous:  Last monthâ�,��"�s inflationary pace was unchanged from the month before, with both March and April numbers coming in at 0.5 percent.  Most remarkable about this number, however, was that just about all of the increase was due to record high oil prices. Core CPI, which excludes costs of food and energy, unexpectedly printed in the negative territory, with a 0.1% decrease in prices for the month. Inflation overall was kept moderate by the extraordinarily expensive Canadian currency, which reached what was at that point its highest level since 1978. This took a bite out of import prices, especially for electronics, and helped moderate the effect of high oil prices.

Richard Lee is a Currency Strategist at FXCM.