Japanese Retail Trade (November) (23:50 GMT, 18:50 EST)
Consensus:  0.5% MoM, 0.5% YoY
Previous: -0.2% MoM, 0.1% YoY

Large Retailersââ,¬â"¢ Sales
Consensus:  -0.6%
Previous: -1.6%

Consensus:  After the second back to back drop in retail sales, a pickup is predicted for the month of December.  However, any increase will be limited due to soft wage or earnings growth.  Increasing overtime work has helped to drive overall income growth, which should help sales and the hope is that the recent strength in corporate earnings will accrue back into wage growth for employees.  Should we see the rebound that the market is looking for, rate hike talks will be resurrected.  However if we see another negative print, the Bank of Japan may have no option than to keep rates on hold throughout the first quarter.  

Previous:  Domestic spending has long been a problem for Japan and the monthly retail sales data has consistently reflected that.  For the second month in a row, retail sales dropped, indicating that private consumption is dragging the economy lower.  In November, sales fell by 0.2 percent as warm weather crimped demand for winter clothes and electronics.  This validated the Cabinetââ,¬â"¢s downgrade of the economy for the first time in 2 years.  It has also pushed the central bank governor to say that they will be closely monitoring the sector to make sure that the developments are temporary. 

Japanese Housing Starts (YoY)(NOV)(5:00 GMT; 0:00 EST)
Consensus: 0.6%
Previous: 2.2%

Consensus:  Rising by 0.6 percent, the consensus figure pales in comparison to previous back to back monthly increases in the housing starts report.  Although beginning strong, starts are expected to slow down in the month of November, pulling the quarterly sentiment lower.  Subsequently, the estimate is far below the 2.2 percent seen in the previous month and bucks the previous string of positive advances, although still remaining positive.  The sentiment should keep rate hike speculation supported for now heading into year end.  However, should the figure pullback more than expected, expectations are likely to shift and push back the expected dates of a rate hike by the Bank of Japan towards the halfway mark in 2007.

Previous:  Housing starts in the worldââ,¬â"¢s second largest economy rose for the third straight month, topping analysts estimates of a 0.7 percent advance.  For the month, housing starts rose by a whopping 2.2 percent with total sales rising by 118,360 units according to the Ministry of Land, Infrastructure and Transport.  The October figure follows up on a 4 percent surge seen in the September home starts report and lends credence to rising speculation of better times to come in the economy.  The strong start in housing additionally lends to positive quarterly results as the year closes with expectations of higher retail trade following close behind.  Both should help in assessing a higher rate decision by the Bank of Japan in the New Year.

French Housing Starts (3M)(YoY)(NOV)(7:45 GMT, 2:45 EST)
Consensus: --
Previous: 2.6%

Consensus: French housing starts are expected to remain buoyed in the month of November, although likely to continue its incremental downtrend as of late.  Since rising by a whopping 12.38 percent in the month of May, the report has pulled back in all but one month.   Housing starts rebounded by 5.4 percent in August, bucking the incremental increase of 4.8 percent the month prior.  Nonetheless, the report is expected to remain positively supported, likely adding to the notion of an economic pickup in the Euro regionââ,¬â"¢s third largest economy as consumers continue to bid up the housing sector.  Subsequently, the notion is likely to help the European Central Bank in justifying already expected interest rate hikes in the near future, adding to further upside risk in the Euro. 

Previous: Housing starts in the French economy rose by 2.57 percent in the month of October, well supported by permits in ordinary housing for the month.  The figure continues to purport an expansionary economic environment as consumers continue to bid up the housing sector, with wealth effects still just around the corner.   However, notably, the figure was still a visible decline to Septemberââ,¬â"¢s rise of 2.64 percent and the second in three months.  As a result, the sentiment remains that housing starts may be on the way out as demand dries up and consumers become settled in their new abodes.

John Kicklighter is a Currency Strategist at FXCM.