UK Visible Trade Balance (British pounds) (DEC) (09:30 GMT; 04:30 EST)
Consensus: -6.900 billion
Previous: -7.193 billion

Outlook: Britain’s visible trade balance deficit is to have widened as increased demand for imports are to outweigh exports in December. An appreciated Sterling and lower crude prices have bolstered the demand for cheaper imports to flow into British markets. Likewise significant, the strong Sterling makes British exports more expensive for foreign consumers. Recently British goods have suffered in global markets as the sterling gained against the dollar. As the trade deficit continues to slide, the Bank of England continues to support forecasted figures of rebounding exports to underpin economic growth. Forecasts are contingent on recent scandals related to VAT fraud on imports have skewed numbers. With sterling gains to continue driving demand for foreign goods, continued pressure is expected to mount for British exports.

Previous: Visible trade balance unexpectedly widened in Europe’s second largest economy as demand for imports surged. The trade deficit came in at 6.9 billion pounds for the month of November, sending the deficit up to a six month high. Exports increased by 1.0 percent while imports rose by 3.1 percent fueled by lower world commodity prices. Imports of crude oil alone for November accounted for 500 million of the total deficit. Manufacturers who have been priced out of domestic and US markets due to an appreciated Sterling looked to their European neighbors to sell their goods. Exports to the EU were able to rise by 2.0 percent adding in an approximate 5.6 billion pounds to the trade balance. Demand for British goods in the EU region is expected to remain robust for the remainder of 2007, allowing for a possible rebalance of the trade account.

Canadian Employment (JAN) (12:00 GMT; 07:00 EST)
                   (Change) (Jobless Rate)
Consensus:   17,000         6.1%
Previous:       61,600         6.1%

Outlook: Following four months of 20,000-plus payroll additions, January employment data is expected to cool. The official consensus among economists forecasts 17,000 new jobs were found last month, keeping the jobless rate at its lowest level in 31 years. Looking for evidence to handicap the employment report, there are few related indicators to draw a conclusion from. One report that should hold a considerable correlation to the labor data is the Ivey PMI’s employment sub-gauge. In its January report of business activity, the Ivey business school’s survey reported a majority of employers were not expecting to pick up their hiring activities. In fact, the 48.9 balance was the lowest the component report has been since December of 2002. Should employment slow going into the new year, it could hamper a rebound in economic growth. In November, the economy expanded 0.2 percent, following two months of stagnation. With the exchange rate still historically unfavorable and US consumer demand still dubious, Canadian growth will rely more heavily on Canadians’ spending habits.

Previous: Canadian employers added 61,600 people to the payrolls in December, more than three times economists’ had predicted. This recent addition was yet another sign that the consumer sector is enjoying a strong labor trend that could carry the economy out of its slowest pace of growth in three years. Looking further into the statistics, the data comes in the most promising places. Full-time payrolls rose 36,900, while part-time employment slowed slightly with a 24,800 person addition. From the sector groupings, goods-producing firms opened the doors to 10,100 new jobs, with notable contributions from the manufacturing and agriculture fields. On the other hand, two-thirds of the pick up came from the service-based industry. Perhaps an indication of a shift in demand, Ontario (the auto center of Canada) reported 41,600 people found employment, while oil-rich Alberta trimmed 3,600 workers.

John Kicklighter is a Currency Strategist at FXCM.