German Retail Sales (NOV) (07:00 GMT; 02:00 EDT)
                         (MoM)           (YoY)
Consensus:         1.0%            0.3%
Previous:            -0.5%           -0.8%

Outlook: Retail sales activity in Europeâ�,��"�s largest economy is expected to mark its biggest monthly rebound in seven months in November. Economists predict a 1.0 percent jump in purchases for the first increase in three months. Domestic spending is expected to ramp up across the board in Germany as businesses and consumers look to avoid Januaryâ�,��"�s VAT tax. In addition, the strong employment trend has lined pocket books and boosted confidence. In November, unemployment dropped by 86,000 people and in turn cut the jobless rate to a four-year low 10.2 percent. In turn, the GfK sentiment gauge rose to its highest level in five years. Furthermore, outside of the economic numbers, Germany has enjoyed its warmest fall on record, encouraging consumers to go to the store. The best source forecasting the governmentâ�,��"�s retail numbers though is likely the recently released PMI figure from Bloomberg.  The gauge jumped to a six-month high 57.7 in November. With a ECB rate decision only a few days after the sales figure, policy officials will monitor the release to determine whether strong consumer spending will heighten inflation pressures and keep growth on track to mark a five-year high.

Previous: German retail sales dropped for the second consecutive month in October. However, the 0.5 percent dip was a considerable improvement compared to the fastest drop in two-years recorded only the month prior. Consumers have visibly begun to control their spending in recent months as the optimistic World Cup effect has slowly turned into fear over the upcoming bump in taxes. On the other hand, economists and officials have revealed their expectations for sales to pick up ahead of the New Year rate hike in order to take advantage of their greater wages and improved employment situation.  While classical retail stores have yet to fulfill these predictions, there is evidence that this is happening with big-ticket items â�,�“ a group of products that would most dearly feel the effects of a higher tax rate.

German Factory Orders (NOV) (11:00 GMT; 06:00 EDT)
                            (MoM)          (YoY)
Consensus:           1.5%            5.3%
Previous:              -1.1%            10.0%

Outlook: German factory orders are expected to rebound in November, as the monthly figure is anticipated to rise 1.5 percent. Domestic demand is likely to jump in November and December as Germans purchase goods en mass in order to avoid the January 2007 VAT hike to 19 percent from 16 percent. This may be just the boost producers in Germany will need as export demand remains vulnerable as the euro appreciated substantially at the end of 2006. Consequently, products out of the Euro-zone became more expensive and thus, less attractive. Nevertheless, a domestically driven economy is far more beneficial for broader expansion and increases the probability of monetary policy tightening by the European Central Bank in the first quarter of 2007.

Previous: Factory orders in Germany unexpectedly dropped for the second consecutive month in October, as the seasonally adjusted figure posted at -1.1 percent while the non-seasonally adjusted annualized figure hit 10.0 percent. The Economy and Technology Ministry in Berlin said that a decline in orders for cars was compensated for by â�,��"domestic demand for other important investment goods such as plants and machineryâ�,� which â�,��"continues to point higher.â�,� German companies are now depending less on exports, which have been a primary drive of growth, as domestic orders for consumer goods rose 1.5 percent in October from a month earlier.

Australian Retail Sales (NOV) (00:30 GMT; 19:30 EDT)
Consensus:         0.3%
Previous:             0.8%

Outlook: Retail sales in Australia are expected to have grown 0.3 percent in November, representing what would be the fourteenth consecutive month in which sales passed unchanged or grew.  The moderation in spending aligns itself with a number of peripheral indicators. Looking to big ticket items, generally the most sensitive to big trend changes in spending, a downward path has already been marked.  The HIAâ�,��"�s new home sales index for the same period printed a 5.3 percent drop while vehicle sales passed the month unchanged. Also, the RBAâ�,��"�s third interest rate hike in the beginning of the month looked to curb lending and spending.  Elsewhere, consumer confidence for the period fell 9.7 percent. While the Westpacâ�,��"�s gauge is rather volatile, it was still the biggest drop in sentiment in three months. Conversely, though a moderation is foreseen in sales, there is still support for a positive figure. Australianâ�,��"�s are encouraged to ease their spending habits as unemployment slips to three-decade lows. Perhaps the most direct contributor to the marketâ�,��"�s expectations is the Cashcard Retail Indexâ�,��"�s performance which tracks purchases made by electronic cards. The indicator posted its biggest increase in six months as those compiling it point to labor trends and cheaper gas prices as the key determinates to the improvement. Should consumer spending continue its steady pace of growth, domestic spending may very well head the drive in inflation that will encourage the RBA to lift the overnight cash rate once again.

Previous: Spending in the retail sector reported its biggest increase in four monthâ�,��"�s with the governmentâ�,��"�s October read. In fact the 0.8 percent rise matched the largest pick up since April. During the period, consumers were working off of a 3.9 percent increase in confidence. The primary updrafts for Australiansâ�,��"� spirits were income tax cuts and the steady decline in gasoline prices. From record highs set in June, the countryâ�,��"�s petrol prices dropped 17 percent.  The influence these two factors had over sentiment was substantial given its ability to supersede concern for GDP decelerating to its slowest pace of growth in three years and the RBAâ�,��"�s hawkish rhetoric pointing to yet another rate hike.  From the breakdown on the headline sales gauge, department store purchases jumped 4.3 percent, food purchases sales up 1.2 percent and consumers spent 4.0 percent more on toys and cameras.

John Kicklighter is a Currency Strategist at FXCM.