A busy and important day for fundamental news on the economic calendar for the euro to dollar and which started earlier with the release of the French month on month CPI numbers which came in better than expected at 0.5% against a forecast of 0.4%.  This number tends to have a relatively muted effect on the market which is really waiting for the German ZEW Economic Sentiment number which is forecast to come in at 59.9 and if the actual comes in better than forecast then this may help to propel the Euro even higher.  The ZEW is a diffusion index based on a survey of German institutional investors and much respected by forex traders.   The afternoon session is then dominated by a raft of tier one data releases in the US with Core Retail Sales, month on month PPI, Retail Sales, Core PPI, Empire State Manufacturing Index, Business Inventories, IBD/TIPP Economic Optimism and all topped off with a speech from Fed Chairman Ben Bernanke.

All the following items of fundamental news are scheduled for release at 13.30 GMT and will dramatically impact both the forex and wider markets as the number will try to give traders and investors a clearer picture of whether the fragile recovery is no more than mirage.  The forecast for Core Retail Sales (excluding cars) is 0.4% against a previous of -0.6% and whilst analysts expect sales to rise what is becoming increasingly obvious is that consumer spending in the US is decidedly muted.  This is hardly surprising given the state of the Labor market and the extent to which consumers are repaying their debt.  Today’s numbers may give the market a clue as to whether the great American consumer will ride to the rescue of the global economy.   At the same time the PPI numbers are released and these are expected at 0.9% against a previous of -0.9% and as a leading indicator of consumer inflation will also indicate if the pendulum is swinging towards inflation or deflation.   The forecast for retail sales is 1.9% against a previous of -0.1%.  Core PPI is expected at 0.1% against a previous of -0.1%.  The final item is the Empire State Manufacturing Index which is expected at 14.7 against a previous of 12.1.

The final set of data is due at 15.00 GMT and starts with a speech from Fed Chairman Ben Bernanke entitled “Reflections on a Year of Crisis” at the Brookings Institute in Washington which on the anniversary of the Lehmans collapse is particularly pertinent.  The speech is followed by a question and answer session which can often cause some unexpected and unintended market reaction.   During the speech the Business Inventories figures will also be released and which measure the change in the total value of goods held in inventory by manufacturers, wholesalers and retailers.  Traders watch this number as it is seen as a signal of future business spending if inventories are seen to have been depleted.  Alternatively, if consumers are refusing to spend then this may explain any fall in this number.  Today’s number is expected to come in at -0.9% against a previous of -1.1%.  Finally the IBD/TIPP Economic Optimism number is due for release which is yet another diffusion index based on a survey of consumers.  The number is expected to come in 52.1 against a previous of 50.3.   As with many indices the number 50 is critical – any figure above is considered optimistic while any figure below being seen as pessimistic.  All in all a highly significant and important day for all markets.