14 January 2008 - 23:02DAily Commentary 1/14/08

A ton of economic data to be released tomorrow that is worth commenting on. Starting with U.K. CPI which will be released at 4:30 am and is expected to fall to only 2% year on year core and 2% real. This is something I have trouble believing, I know the Pound has been strong and that has helped mitigate high commodity prices but with PPI at such outrageous proportions I inclined to expect a higher than forecast increase. The retail price index is expected to gain on the month but hold steady on the year at 4.3% and also bears watching. Later on at 5 am we have the German ZEW to be released which gauges economic sentiment and is a very important insight into German business expectations and therefore purchasing and employment. The consensus is that expectations will deteriorate further and if the figure comes in any worse than -40 expect the Euro to fall a good 50 pips or more. Then it is a huge batch of U.S. numbers at 8:30 am with Empire manufacturing Index to be released but more importantly retail sales which are expected to rise a measly .1% and PPI which is expected to come in at .2 % month on month and be at an even 2% core year on year. Real PPI is expected to be 7.4% year on year. What I see happening is that retail sales miss the mark and the dollar falls but that PPI is higher than expected and helps limit the dollars losses in the A.M. session.