Eurozone PMI Manufacturing (DEC) (23:00 GMT; 4:00 EST)
Consensus: 56.8
Previous: 56.6

Outlook: Manufacturing activity is expected to remain stable in the month of December adding to a recently appreciating underlying euro.  Figures in all respective economies, especially the major economies, are expected to remain stable compared to last monthâ�,��"�s figures.   Notably, retail sales have risen in Spain and France, with French consumption leading with a 4.3 percent annualized rise.  German retail sales are also expected to increase positive in the upcoming reading.  Along with healthy domestic consumption, exports in the German economy are additionally expected to contribute to the overall higher figure as industrial production and export figures have risen in the past couple of months.  All in all, the stabilized manufacturing picture is expected to keep central bankers tightening the benchmark rate in suppressing any hints of climbing inflationary pressures in the region.  Futures traders are in sync with the notion as the market continues to anticipate at least two more rate hikes by the June 2007 month.

Previous:  European manufacturing activity expanded for the 17th consecutive month as the export sector continues to add a healthy dose to the overall Euro zone economy.  In the month, the reportâ�,��"�s results are reflective of the 11 percent surge in demand for European based goods for the first eight months of the year.  The notion will likely produce a 2.6 percent rate of growth, the fastest pace in six years for the Euro region in 2006.  As a result, the survey for the month of November remained relatively stable at 56.6, compared to the 57 reading seen in October with confidence among consumers remaining close to a six year high in the month of November.  Subsequently, business confidence is also higher in Germany, matching a 15-year high.  Ultimately, the surveyâ�,��"�s results are likely to purport further speculation of a continuation in the current tightening cycle being implemented by the European Central Bank.  Expectations are for at least two rate hikes by the first half mark of 2007.  

UK Manufacturing PMI (DEC) (8:30GMT; 4:30EST)
Consensus: 52.6
Previous: 52.6

Outlook: The purchasing managersâ�,��"� index for the UK manufacturing sector is anticipated to hold at 52.6 in December, indicative of expansion. With the British pound holding at or near record highs for most of the month, export orders will likely take a hit as products out of the UK become increasingly expensive and less attractive. However, domestic orders could make up some of the softness in exports, as CBI industrial trends for December indicated a rise in total orders as well as expectations for output volumes. Furthermore, retail sales have increased over the past two months, which indicates improving consumer spending in the UK economy. The price components are likely to continue to show a squeeze in profit margins, as input prices have repeatedly outweighed output prices significantly. Nevertheless, the manufacturing sector is expected to remain relatively strong despite its fragile nature, and should help contribute to GDP in coming months.

Previous: UK manufacturing PMI unexpectedly slipped to 52.6 in November, as the October result was revised down to 53.5 from 53.7. The figure was dragged lower by declines in output, new orders, export orders, and employment. Additionally, output prices showed a marked drop to 53.8 from 56.0, while input prices remained elevated at 63.2, down slightly from 63.4. The results run directly counter to CBI industrial orders for the same month, which surged to -6 from -20, and highlights the fragility of the sector. Additionally, the individual components signal that the labor market could be loosening a bit and that manufacturers may lack the pricing power to push through costs to consumers, limiting inflation pressures.

US ISM Manufacturing (DEC) (15:00 GMT; 10:00 EST)
Consensus: 50.0
Previous: 49.5

Outlook: The National ISM index is expected to bounce after dropping into contractionary territory last month.  The rebound in the housing market as evidenced by the rise in new and existing home sales could help to boost construction spending.  Even though we saw a horrid Philly Fed print for the same month, the ISM adjusted level actually increased.  Furthermore, the Chicago PMI index also moved back into expansionary territory which suggests that the ISM number may not be as bad as the prior Philly Fed print. However prices paid could contract thanks to the low level of oil prices. 

Previous:  The National ISM manufacturing index dipped into contractionary territory for the first time in three years.  The index was dragged lower by the weakness in construction spending, which fell to a five year low.  The surprise drop reignited talk that the US economy may be headed for a recession after the head of the ISM index said that the index could stay below 50 for â�,��"several months.â�,�   Weakness was seen in many of the underlying components including employment, production and new orders.  The one sub-index that did rise was prices paid.  Still prevalent inflation pressures retained the Federal Reserveâ�,��"�s focus on inflation. 

John Kicklighter is a Currency Strategist at FXCM.