Australian TD Securities Inflation (DEC) (23:30 GMT; 18:30 EDT)
                   (MoM)       (YoY)
Consensus:     n/a          n/a
Previous:       0.2%        3.5%

Outlook: TD Securitiesââ,¬â"¢ proprietary measure of Australian inflation has no consensus attached to it. However, a number of economic indicators from the same period suggest the December price gauge will find some upward momentum. Flushing out a few indirect price reads, the AiGââ,¬â"¢s services and manufacturing surveys offers a preliminary view of the TD gauge. The input cost component for service-based firms stepped up 5.2 points to the highest level since August in its December measurement, while the factory equivalent moved little from its own four-month high. Consumer demand may also have promoted a boost in inflation. Consumer confidence grew to a 17-month high according to Westpacââ,¬â"¢s sentiment gauge. Such optimistic projections come from unemployment at 30-year lows and benchmark equity indices at record highs. However, confidence may not be a direct lead in to spending. According to last monthââ,¬â"¢s CashCard Index, purchases at retailers made on electronic cards slipped 0.1 percent for the first contraction in months. This suggests three rate hikes over the past year have raised caution in liberal spenders. Should inflation survive Novemberââ,¬â"¢s rate adjustment, the strength in Australiaââ,¬â"¢s economy may leave the RBA little recourse but to consider another hike.

Previous: Consumer-level inflation accelerated in November, ending two consecutive months of stagnant price pressure. For the month, price growth stepped up to 0.2 percent, which in turn pushed the annual rate up to a three-month high 3.5 percent. From the breakdown, the pressures were rather scattered as 25 component classes reported higher output prices while 47 groups marked contractions for the period. Key among the risers were jumps in holiday travel, health and finance costs derived from Novemberââ,¬â"¢s RBA rate hike.  Conversely, gas, fresh fruit and computer prices paced the declining group. Trimming out volatile component like energy and food prices, core inflation was still able to perk up 0.4 percent in November while the annual gauge took to 2.7 percent expansion. These numbers compare to the governmentââ,¬â"¢s official, quarterly inflation report which has held outside the RBAââ,¬â"¢s 2 to 3 percent tolerance band for two consecutive periods. At 3.9 percent, traders will monitor TDââ,¬â"¢s numbers to try and decipher whether the governmentââ,¬â"¢s numbers will continue to pressure the central bankââ,¬â"¢s policy group.

UK Producer Price Index (MoM) (DEC) (09:30 GMT; 04:30 EDT)
                       (Output)            (Input)
Consensus:        0.1%               0.2%
Previous:            0.0%               0.1%

Outlook: Factory-level inflation is expected to have accelerated in the UK through December. Economists expect input prices grew 0.2 percent over the period while output prices rose 0.1 percent. These predictions leverage the pinch executives are taking on an inefficient pass through of higher costs to the consumer. Businesses may have been hesitant to push the prices of their goods higher into the final month of the year in order to secure strong holiday season sales while at the same time not frightening off increasingly frugal consumers. In December, two measurements of consumer confidence each marked relative lows. GfKââ,¬â"¢s proprietary survey slipped to its lowest level in a year, while the Conference Board printed a two-year low as respondents voiced their dissatisfaction over the Bank of Englandââ,¬â"¢s third rate hike for the year in November. With Brits already holding high levels of debt, the five-and-a-half year high overnight interest rate is pressing mortgage rate payments even higher. Perhaps the most direct look into the inflation dynamic through average UK producer comes from the December manufacturing activity survey reported not long ago. As the headline number slipped to a nine-month low, the price components followed suit.  The output price sub-gauge slipped for the second month while the input number dropped for a fourth month. Should inflation at the producer level continue to abate, consumer price growth may not be far behind. Nevertheless, expectations for wage negotiations based off of the RPI will keep the BoE on its toes ââ,¬â€œ at least until it is apparent how wage growth has developed for the new year.

Previous: Manufacturers were able to salvage their profit margins in November by stabilizing the prices they received for goods while input costs continued to edge lower. Factories have struggled to rebound from their on-again-off-again recessions as the BoE follows through with steady interest rate hikes, an appreciating pound cuts into export demand and expensive commodities raise costs. In November, input prices cooled once again, continuing a trend that was only interrupted in October. On the month, prices paid by factories rose a modest 0.1 percent, allowing the annual gauge to contract to a 2.8 percent, its slowest pace of growth since March of 2004. On the other hand, output prices finally ended their own decline. After two months of deflation prices, Novemberââ,¬â"¢s read went unchanged; while the annual figure accelerated off of its own 32-month low.

EZ Industrial Production (NOV) (10:00GMT; 5:00EST)
                     (MoM)            (YoY) 
Consensus:     0.8%             3.1%
Previous:        -0.1%             3.6%

Outlook: Euro-zone industrial production is anticipated to rebound as demand for exported products likely remained buoyant, despite a strengthening euro. The October manufacturing PMI reading bodes well for the industrial production report, as PMI rose to 57.0 from 56.6 on the back of increases in output and new orders. Additionally, solid German data for November creates substantial upside risk, as industrial output unexpectedly jumped 1.8 percent, resulting in an annual rate of 6.0%. A marked pickup in construction led the gain at 6.2 percent while energy output posted 2.5 percent ââ,¬â€œ all of which contributed to the largest trade surplus ever recorded for Germany at 18.5 billion euros. Overall, the data indicates that industrial output is in for a booming month during November.

Previous: Industrial production continued to decline in the Euro-zone during October, edging down 0.1 percent after plummeting 1.1 percent the month prior. The decline was led by a 1.7 percent drop in energy production, but given the relatively low price of oil, this fall is not completely unexpected. Capital goods output slipped for the second consecutive month at a rate of 0.8 percent. Additionally, with the euro at relatively high levels, Euro-zone products were a more expensive, less attractive option for importers.

Japanese Domestic CGPI (DEC) (23:50GMT; 18:50EST)
                      (MoM)            (YoY) 
Consensus:      0.0%             2.5%
Previous:         -0.1%             2.7%

Outlook: Producer prices in Japan are expected to recover little from Novemberââ,¬â"¢s pull back.  Decemberââ,¬â"¢s Corporate Goods Price Index is expected to remain unchanged, pulling the annual measurement down to a 2.5 percent pace of growth.  With raw materials prices remaining weak during the month, there are few underlying price pressures to feed into the larger index. A release of tepid CGPI will give little impetus for the Bank of Japan to hike rates at their January meeting, as the lack of inflation in consumer prices along with stagnant consumption creates the risk of recession if the central bank decides to tighten too early. Nevertheless, the Bank of Japanââ,¬â"¢s outlook continues to forecast consumer spending growth, which has left the markets pricing in a 66 percent chance of a 25 basis point benchmark increase on January 18th.

Previous: The Domestic Corporate Goods Price Index, a measure of prices at the factory level, slipped 0.1 percent over the month of November.  The slowdown in inflation pressure came at an unfavorable time as central bankers deliberated whether deflation has finally come to an end in the nation.  Central to the drop in the overall indicator was yet another month of falling energy prices.  The component of oil and oil-related products fell 5.8 percent following a 7.3 percent drop in the prior period.  In a broader context, though cheaper costs helped producers to secure revenues while domestic spending struggles to rise, it has also played a part in keeping healthy inflation from finding its way back into the economy.  If prices do not steadily rise into the future, the BoJ may be forced to hold its hand on any more rate hikes.

John Kicklighter is a Currency Strategist at FXCM.