Japanese Merchandise Trade Balance (NOV) (23:50 GMT; 18:50 EST)
Consensus:  �,¥600 billion
Previous:  �,¥614.7 billion

Outlook:  Merchandise trade is likely to have remained in the black, however, still accommodative to the recent downtrend that has been occurring recently.  With last monthâ�,��"�s figure already being revised lower, expectations are for the trade surplus to narrow once again to 600 billion yen for the month of November as export strength continues to wane on thin demand.  However, with crude oil prices slightly lower throughout the month, there still remains a possibility that improvements had occurred in November.  Consumer sentiment has remained supported in the major trade partners which is likely to bolster further spending as has been witnessed in the US.  A major importer of Japanese goods, retail sales figures have ticked higher in the month along with increases seen in the Eurozone and China.  Notably, UK retail consumption has increased to levels high enough to spark further rate increase speculation.  Although not a correlative relationship, the notion does purport further spending by foreign trade partners.  As a result, improvements will likely spark some yen strength in the near term.  However, momentum remains weak at this point with central bankers opting out of rate increases this year and next till domestic consumption vaults higher.

Previous:  Japanâ�,��"�s merchandise trade balance narrowed once again, posting a 614.7 billion yen surplus for the month of October as global demand seems to be waning at the end of the year.  Higher crude prices and notable slowdowns in some of the worldâ�,��"�s largest economies have negatively effected the once supported export market in Japan, likely to effect growth to the downside.  In the third quarter, capital spending and export growth kept expansion alive to the tune of 2 percent in Japanese economy as domestic consumption continued to take a back seat on consumer hesitance.  Ultimately, the aforementioned has led to a 24.8 percent dropin the surplus as export growth was the slowest in six months.  Exports rose only by 11.6 percent with declines seen to all major trade partners.  Most notably, exports to the US economy which is responsible for a fifth of the exports declined to the 13.5 perecnt compared to the 20.5 percent rate in the previous month.  Declines were also seen in exports to the Eurozone and China.  The shrinkage is likely to weigh heavily on policy makersâ�,��"� decision to raise interest rates at the end of 2006 and the first quarter of 2007.    

Canadian Gross Domestic Product (OCT) (13:30 GMT; 8:30 EST)
Consensus: 0.1%
Previous: -0.3%

Outlook:  Expectations are still tepid even as the consensus is looking for an upturn in the nationâ�,��"�s gross domestic product figure tomorrow.  Declining by 0.3 percent last month, expectations are riding high of a rebound of 0.1 percent as several factors have ticked higher since September.  Bolstered on lower energy prices, manufacturing activity remained higher in the month along with improvements in the retail sector as increases in employment are likely to have boosted consumer spending.  All in all, the figure is still likely to be kept in the context of a 1.7 percent annualized growth rate, boosting the likelihood that rates will not be adjusted in the near term.  With a slower rate of growth, lower than the 2.8 percent forecasted by the central bank, bearish undertones will continue to remain in the market.  The notion will only strengthen the sentiment that interest rates will be cut in the third quarter in order to spur domestic interest.

Previous:  Gross domestic product slowed to the lowest level in three years as homebuilding and manufacturing declines dragged overall expansion in the economy.  Posting a decline of 0.3 percent, the Statistics Canada report lends further confirmation to earlier statements by Bank of Canada Governor Dodge.  Noting the slow down in the country, Dodge reaffirmed the market that the current conditions are reflective of a â�,��"mildâ�,� and â�,��"short livedâ�,� slowdown as the economy pares back on an appreciated currency and previous strength.  As a result, the central bank continues to forecast a 2.8 percent rate of growth in the year even with the monthâ�,��"�s report purporting a likely 1.7 percent easing in the third quarter.  Previously, first quarter estimates pitted a stronger 3.8 percent rate of growth.  Ultimately, this will keep hawkish decisions off the table for now with traders pricing in the likelihood that rates will be cut in the third quarter of next year in order to spur domestic advancement.

Canadian Retail Sales (OCT) (MoM) (13:30 GMT; 8:30 EST)
Consensus: -0.5%
Previous:  -1.2%

Retail Sales ex-Auto
Consensus: -0.2%
Previous: -0.9%

Outlook: Expectations are high for a positive swing in Canadian retail sales even as the overall figure is expected to remain relatively suppressed for the month.  As the economy continues to remain in a mild slowdown, consumers are remaining resilient, reflected in the most recent sentiment survey reading of 119 according to the Conference Board of Canada.  Earlier this month, the survey dropped 1 point to 119, the lowest reading in a year but still suggestive of an expansionary environment.  Contributing to the stable optimism seems to be pick ups in employment and housing starts for the month.  Notably, the month saw an increase of 50,000 opportunities boosting the likelihood that spending will rise in tandem as consumers are privy to larger amounts of disposable income.  The notion will keep Bank of Canada Governor David Dodgeâ�,��"�s decision to cut interest rates at bay, for now, until further weakness purports justification.

Previous:  Canadian retail sales figures declined in line with other previously disappointing fundamental data for the worldâ�,��"�s ninth largest economy.  Declining the most in a year, the retail report dropped by 1.2 percent in the month of December as consumers bought fewer cars and building related materials even in the face of declining crude oil prices.  Subsequently, overall sales declined by $28.7 billion according to Statistics Canada in the month.  Far lower than the 0.9 percent anticipated by the market, the current reading coincides with recent declines seen in the export and manufacturing sectors in previous months.  For the record, wholesale sales dropped by 1.6 percent in September, the biggest monthly decline since July 2005.  Additionally, factory shipments plummeted to their lowest level in almost two years as petroleum product and automobile sales slumped.  All but confirming earlier notions of a â�,��"mildâ�,� slowdown, the retail sales report is likely to keep a bearish undertone to the currency as interest rate cut speculation is now beginning to surface.

US Philadelphia Fed Survey (DEC) (17:00 GMT; 12:00 EST)
Consensus: 4.0
Previous: 5.1

Outlook: A modest pullback is expected in the Philadelphia Fed manufacturing survey as activity is still estimated to have been buoyed by consumer interest.  Even though a housing slump currently looms over the economy, domestic individuals remain resilient as employment prospects remain stable and energy costs have taken a slight downturn.  According to recent consumer confidence surveys in previous months, consumer sentiment remains supported in the current assessment with the University of Michiganâ�,��"�s sentiment report showing a mild uptick to 108.2 from 106 in the month of December.  The aforementioned looks to be confirmed as retail sales figures additionally rose in the month by a whopping 1 percent with core figures additionally purporting a positive percentage increase.  However, with energy costs slightly higher compared to last monthâ�,��"�s report, manufacturers are likely to see some pull backs ahead of the seasonal shift.  As a result, the figure is anticipated to have increased modestly to 4 from last monthâ�,��"�s 5.1 figure.  The sustained expansionary suggestion should keep currency markets in range as it continues the recent string of positive US data. 

Previous:  Bucking the previous decline, the Philly Fed report rose for the first time in three months for November as lower energy costs boosted manufacturing activity in the region.  The general economic index, or headline figure, rose to 5.1 from a minus 0.7 in the previous month lending plenty of optimism to the state of the overall economy.  Until the monthâ�,��"�s positive print, the survey has actually been on a steady decline as manufacturers and producers cite a softening housing picture as contributing to the slowdown.  However, with lower energy costs freeing up disposable income in the month, consumers may be making a final push towards the end of the year.  Coincidentally, retail sales have supported the notion, incrementally being supportive in the fourth quarter.  However, contrary to optimism, the regional surveyâ�,��"�s employment index plummeted to 0.2, the lowest in more than three years with expectations dropping to a 12.4 print.

John Kicklighter is a Currency Strategist at FXCM.