At 4:30 a.m. we will have UK CPI y/y coming out. Historically I was trading the y/y headline but recently the core number became more in focus so make sure that the deviation agrees between the headline and the core number; if there is a conflict, I would stay out. Historically, the headline is more powerful but keep in mind that in November we had a tradable deviation on it but the core number screw everything up. I would trade a 0.2 deviation on the headline y/y. If it comes out at 2.2 or higher, it would be a buy GBP/USD signal. If it comes out at 1.8 or lower, then it would be a sell GBP/USD signal.
Tuesday, January 15th, 2008 (5:00 a.m. New York Time) GERMANY, EURO ZONE
At 5:00 a.m we will have German ZEW. A deviation of 15 can be tradable but this indicator is not a hot indicator, not even warm so I don't recommend trading it at this time.
Tuesday, January 15th, 2008 (8:30 a.m. New York Time) USA
At 8:30 we will have U.S. Core Retail Sales X Autos m/m coming out. It is expected to come out at -0.1%. This is a key indicator as people are asking if the U.S. is in recession now. I will be trading USD/JPY with 0.6 trigger. If it comes out at -0.7% or more negative, that would be a very weak number and I would sell USD/JPY. If it comes out at +0.5 or higher, it would be a positive signal for the U.S. dollar, and I would buy USD/JPY. If the trigger is hit, I would expect 35 pips of price action either direction. One more thing: we will also have the U.S. PPI number and Empire Survey. If the Core Retail Sales comes out very close to expectations, look for a big deviation on PPI number such as 0.3 or 0.4, and on Empire Survey a deviation such as 10 or more. This is not necessarily a trade but an idea what may happen if the Retail Sales comes out flat.