On Tuesday, the UK's services PMI for December will be closely watched as the euro zone countries release their final measures. The UK's index is expected to decline to a reading of 39.0 from 40.1 in November. Also of note on Tuesday is the euro zone CPI estimate for December, expected to decline to +1.8% from +2.1% in November.

The German employment report on Wednesday is another event that will be closely watched. Economists expect a 10k increase in unemployed persons in December, but no change to the 7.5% unemployment rate previously recorded.

The main event of the week comes on Thursday when the bank of England will make its interest rate decision. The bank is expected to slash rates by another 50 bps to 1.50%. The SONIA market, however, has priced in a 29% chance of a 100 bps reduction as of Dec. 30.

"It seems a stone dead certainty that the Bank of England will deliver another hefty interest rate cut next Thursday," said IHS Global Insight Economist Howard Archer. "With the recession deepening, credit conditions remaining worryingly tight and inflationary pressures retreating sharply, there is intense pressure on the MPC to bring interest rates down sharply further."

On Friday, German retail sales for November are expected to increase 0.4% on the month following a 1.6% contraction in October. Economists expect a 0.1% decline on the year compared to the previous 1.5% fall.

Also on Friday, the UK will receive its industrial and manufacturing production report for November, which is expected to show a 0.6% month-over-month contraction in IP compared to the 1.7% decline in October, for an annual growth rate of -5.3%. Manufacturing production is also expected to fall 0.6% on the month following a 1.4% contraction previously, and annual production is forecast to decline 5.3% compared to the 4.9% pullback previously.

All times in EST

Sunday:

13:15 EU ECB's Papademos Speaks on Euro in San Francisco

Monday:

0:00 JN Vehicle Sales Y/Y DEC Prior: -27.3%

4:30 UK PMI Construction DEC Prior: +31.8

4:30 EU Sentix Investor Confidence JAN Prior: -42.3

5:00 IT CPI (NIC including tobacco) M/M DEC Preliminary Exp: -0.2% Prior: -0.4%

5:00 IT CPI (NIC including tobacco) Y/Y DEC Preliminary Exp: +2.3% Prior: +2.7%

5:00 IT CPI - EU Harmonized M/M DEC Preliminary Exp: -0.1% Prior: -0.5%

5:00 IT CPI - EU Harmonized Y/Y DEC Preliminary Exp: +2.4% Prior: +2.7%

Tuesday:

2:00 UK Nationwide House prices SA M/M DEC Exp: -1.5% Prior: -0.4%

2:00 UK Nationwide House prices NSA Y/Y DEC Exp: -14.6% Prior: -13.9%

2:45 FR Consumer Confidence Indicator DEC Exp: -44 Prior: -43

3:50 FR PMI Services DEC Final Exp: +41.6 Prior: +41.6

3:55 GE PMI Services DEC Final Exp: +46.4 Prior: +46.4

4:00 EU PMI Services DEC Final Exp: +42 Prior: +42

4:00 EU PMI Composite DEC Final Exp: +38.3 Prior: +38.3

4:30 UK PMI Services DEC Exp: +39 Prior: +40.1

4:30 UK Official Reserves DEC Prior: +$2249M

5:00 EU Euro-Zone CPI Estimate Y/Y DEC Exp: +1.8% Prior: +2.1%

19:01 UK Nationwide Consumer Confidence DEC Prior: +50

Wednesday:

2:00 GE Wholesale Price Index M/M DEC Exp: -1.7% Prior: -3.3%

2:00 GE Wholesale price Index Y/Y DEC Exp: -2.0% Prior: -0.8%

2:00 GE ILO Unemployment Rate NOV Exp: +7.1% Prior: +7.1%

3:45 IT PMI Services DEC Exp: +39.1 Prior: +39.5

3:55 GE Unemployment Change DEC Exp: +10K Prior: -10K

3:55 GE Unemployment Rate SA DEC Exp: +7.5% Prior: +7.5%

5:00 EU Euro-Zone PPI Y/Y NOV Exp: +4.5% Prior: +6.3%

5:00 EU Euro-Zone PPI M/M NOV Exp: -0.9% Prior: -0.8%

SO ECB's Trichet Speaks in Slovakia at Euro Event

Thursday:

2:00 GE Trade Balance NOV Prior: +€16.4B

2:00 GE Current Account NOV Prior: +€15.0B

2:00 GE Imports SA M/M NOV Prior: -3.5% Revised: -3.7%

2:00 GE Exports SA M/M NOV Prior: -0.5% Revised: -0.6%

5:00 EU Euro-Zone Unemployment Rate NOV Exp: +7.8% Prior: +7.7%

5:00 EU Euro-Zone GDP SA Q/Q 3Q Final Exp: -0.2% Prior: -0.2%

5:00 EU Euro-Zone GDP SA Y/Y 3Q Final Exp: +0.6% Prior: +0.6%

5:00 EU Euro-Zone Household Cons Q/Q 3Q Final Prior: +0.0%

5:00 EU Euro-Zone Gross Fix Cap Q/Q 3Q Final Prior: -0.6%

5:00 EU Business Climate Indicator DEC Exp: -2.8 Prior: -2.14

5:00 EU Euro-Zone Government Expend Q/Q 3Q Final Prior: +0.8%

5:00 EU Euro-Zone Consumer Confidence DEC Exp: -26 Prior: -25

5:00 EU Euro-Zone Economic Confidence DEC Exp: +72 Prior: +74.9

5:00 EU Euro-Zone Industry Confidence DEC Exp: -30 Prior: -25

5:00 EU Euro-Zone Services Confidence DEC Exp: -13 Prior: -12

6:00 GE Factory Orders M/M SA NOV Exp: -1.6% Prior: -6.1%

6:00 GE Factory Orders Y/Y NSA NOV Exp: -19.7% Prior: -17.3%

7:00 UK BOE ANNOUNCES RATES Exp: 1.50% Prior: 2.00%

Friday:

2:00 GE Retail Sales M/M NOV Exp: +0.4% Prior: -1.6%

2:00 GE Retail Sales Y/Y NOV Exp: -0.1% Prior: -1.5%

2:45 FR Industrial Production M/M NOV Exp: -0.8% Prior: -2.7%

2:45 FR Industrial Production Y/Y NOV Exp: -5.8% Prior: -7.2%

2:45 FR Manufacturing Production M/M NOV Exp: +0.4% Prior: -3.2%

2:45 FR Manufacturing Production Y/Y NOV Exp: -6.6% Prior: -8.4%

2:45 FR Trade Balance NOV Exp: -€6.5B Prior: -€7.1B

4:00 IT Deficit to GDP YTD 3Q Prior: +2.6%

4:30 UK PPI Input NSA M/M DEC Exp: -2.0% Prior: -3.3%

4:30 UK PPI Input NSA Y/Y DEC Exp: +3.1% Prior: +7.5%

4:30 UK PPI Output NSA M/M DEC Exp: -0.6% Prior: -0.7%

4:30 UK PPI Output NSA Y/Y DEC Exp: +4.0% Prior: +5.1%

4:30 UK PPI Output Core NSA M/M DEC Exp: -0.2% Prior: +0.2%

4:30 UK PPI Output Core NSA Y/Y DEC Exp: +4.7% Prior: +5.1%

4:30 UK Industrial Production M/M NOV Exp: -0.6% Prior: -1.7%

4:30 UK Industrial Production Y/Y NOV Exp: -5.3% Prior: -5.2%

4:30 UK Manufacturing Production M/M NOV Exp: -0.6% Prior: -1.4%

4:30 UK Manufacturing Production Y/Y NOV Exp: -5.3% Prior: -4.9%

5:00 EU Euro-Zone Retail Sales M/M NOV Exp: -0.1% Prior: -0.8%

5:00 EU Euro-Zone Retail Sales Y/Y NOV Exp: -1.6% Prior: -2.1%

6:00 GE Industrial Production Y/Y (NSA) NOV Exp: -5.5% Prior: -3.8%

6:00 GE Industrial Production M/M SA NOV Exp: -2.0% Prior: -2.1%

By Erik Kevin Franco, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Sarah Sussman, This email address is being protected from spam bots, you need Javascript enabled to view it

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