Japanese Economics Minister Akira Amari said on Friday that the Bank of Japan (BoJ) should exclude oil prices when judging whether it has reached its 2% inflation target.

"If oil prices continue to decline this should be considered an unexpected event. The correct thing to do is to subtract the decline in oil prices when judging whether the BOJ has achieved its inflation target," he said.

The International Monetary Fund (IMF) Managing Director Christine Lagarde said on Friday that a British exit (Brexit) from the European Union (EU) could weigh on the Britain's outlook.

"Uncertainty associated with the outcome of the planned referendum on EU membership could weigh on the outlook," she said.

"Certainty is always better than uncertainty," the IMF managing director added.

Lagarde said that she hoped the country would stay in the EU.

The European Central Bank (ECB) Executive Board member Peter Praet said in an interview with German Handelsblatt published on Thursday that the central bank's stimulus measures were working.

"It's working very well. In fact we were pleased to see how strongly our monetary policy has improved credit conditions. The impact on inflation however seems to be taking longer," he said.

Praet pointed out that the ECB is ready to add further stimulus measures if needed.

"We have clearly said that we are ready to do more, if this became necessary. The precise choice of instruments cannot be determined long in advance; it is based on the specific circumstances. The asset purchase programme is sufficiently flexible for its size, composition and duration to be adapted if necessary," he noted

The European Central Bank (ECB) Executive Board member Benoit Coeure said on Friday that the main risk to inflation in the Eurozone "is now off the table".

"The biggest risk to inflation is now off the table: that was the risk of deflation, self-reinforcing deflationary expectations, what we call the de-anchoring of inflationary expectations," he said.

Coeure noted that the ECB could adjust its stimulus measures if there are risks to inflation.

He also said that the slowdown in emerging economies remains the top downside risk to the Eurozone's economy.

The U.S. Commerce Department released the business inventories data on Friday. The U.S. business inventories were flat in October, missing expectations for a 0.1% rise, after a 0.1% gain in September. September's figure was revised down from a 0.3% increase.

Retail inventories climbed 0.1% in October, wholesale inventories were down 0.1%, while manufacturing inventories fell 0.1%.

Retail sales were flat in October, while business sales dropped 0.2%.

The business inventories/sales ratio climbed to 1.38 months in October from 1.37 months in September. The business inventories /sales ratio is a measure of how long it would take to clear shelves.

The Thomson Reuters/University of Michigan preliminary consumer sentiment index climbed to 91.8 in December from a final reading of 91.3 in November, missing expectations for an increase to 92.0.

"While the preliminary December reading was largely unchanged from last month, consumers evaluated current economic conditions more favourably and expected future prospects less favourably," the Surveys of Consumers chief economist at the University of Michigan Richard Curtin said.

"Overall, the Sentiment Index has averaged 92.9 during 2015, the highest since 2004, with only 10 higher yearly averages in the past half century. The data continue to indicate that real consumer expenditures will grow by 2.8% in 2016 over 2015," he added.

The index of current economic conditions increased to 107.0 in December from 104.3 in November, while the index of consumer expectations fell to 82.0 from 82.9.

The one-year inflation expectations fell to 2.6% in December from 2.7% in November.

The Central Bank of Russia (CBR) kept its interest rate unchanged at 11.0% on Friday. This decision was expected by analysts.

The central bank noted that inflation risks increased, while risks of the slowdown in the economy remained.

"As inflation slows down in line with the forecast and on condition inflation risks recede, the Bank of Russia will continue with a downward revision of its key rate, to be decided at one of its forthcoming Board of Directors meetings," the CBR said.

The central bank expects the consumer price inflation to be about 6% in late 2016, and 4% in 2017.

"The external trade restrictions imposed against Turkey from January 2016 will not have a significant impact on consumer prices. These restrictions are estimated to add about 0.2-0.4 pp to inflation till the end of 2015 and in early 2016," the central bank pointed out.

Risks to inflation are low oil prices, monetary policy normalisation by major central banks and further slowdown in the Chinese economy, according to the CBR.

The central bank cut its interest rate five times in 2015.

The next meeting of the CBR is scheduled to be January 29, 2016.

The U.S. Commerce Department released the producer price index figures on Friday. The U.S. producer price index increased 0.3% in November, exceeding expectations for a flat reading, after a 0.4% drop in October.

A stronger U.S. dollar and weak global demand weigh on inflation.

Services prices were up 0.5% in November, while prices for goods declined 0.1%.

Food prices climbed 0.3% in November, while energy prices declined 0.6%.

On a yearly basis, the producer price index decreased 1.1% in November, beating forecasts of a 1.4% decline, after a 1.6% fall in October.

The producer price index excluding food and energy rose 0.3% in November, exceeding expectations for a 0.1% gain, after a 0.3% decrease in October.

On a yearly basis, the producer price index excluding food and energy climbed 0.5% in November, beating forecasts of a 0.2% increase, after a 0.1% rise in October.

These figures could mean that the Fed will start raising its interest rate next week.

EUR/USD: $1.0700(E442mn), $1.0800(E440mn), $1.0850(E314mn), E$1.0900(E991mn), $1.0930-35(E364mn), $1.0950(E225mn), $1.1000(E1.61bn)

USD/JPY: Y121.20-25($750mn), Y122.00($865mn), Y123.50($250mn), Y124.00($351mn)

GBP/USD: $1.5200(Gbp923mn)* EUR/GBP Gbp0.7000(E315mn), Gbp0.7200(E234mn)

USD/CHF: Chf0.9800($200mn)* EUR/CHF Chf1.0900(E468mn)

AUD/USD $0.7050(A$422mn), $0.7195-0.7200(A$1.582bn), $0.7225-30(A$1.33bn), $0.7300(A$331mn)

AUD/NZD: NZ$1.1000(A$790mn) * NZD/USD: $0.6775-81(NZ$475mn), $0.6800(NZ$319mn)

USD/CAD: C$1.3600($1.01bn)

The U.S. Commerce Department released the retail sales data on Friday. The U.S. retail sales climbed 0.2% in November, missing expectations for a 0.3% increase, after a 0.1% gain in October.

The lower increase was mainly driven by a fall in automobiles purchases. Sales at auto dealerships declined 0.4% in November.

Retail sales excluding automobiles increased 0.4% in November, beating forecasts of a 0.3% gain, after a 0.1% rise in October. October's figure was revised down from a 0.2% increase.

Sales at building material and garden equipment stores fell 0.3% in November, while sales at furniture stores decreased 0.3%.

Sales at clothing retailers climbed 0.8% in November, while sales at service stations dropped 0.8%.

These figures could be strong enough for the Fed's interest rate hike next week.

According to the Business NZ Survey published on late Thursday evening, the Business NZ performance of manufacturing index (PMI) for New Zealand rose to 54.7 in November to 53.2 in October. October's figure was revised down from 53.3.

A reading above 50 indicates expansion in the manufacturing sector.

The rise was mainly driven by a faster expansion in new orders and employment.

"New orders (57.8) was at its highest level since June, as was employment (53.7). Also, the proportion of positive comments for November (68.6%) was a healthy pick up from both October (61.8%) and September (58.7%). A number of comments centred on seasonal factors at play, although others mentioned good customer demand, both domestically and offshore," Business NZ's executive director for manufacturing, Catherine Beard, said.

Economic calendar (GMT0):

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual)

07:00 Germany CPI, m/m (Finally) November 0.0% 0.1% 0.1%

07:00 Germany CPI, y/y (Finally) November 0.3% 0.4% 0.4%

09:30 United Kingdom Consumer Inflation Expectations 2% 2.0%

10:15 Eurozone Targeted LTRO 15.5 18.3

The U.S. dollar traded mixed against the most major currencies ahead the release of the U.S. economic data. The U.S. retail sales are expected to rise 0.3% in November, after a 0.1% gain in October.

Retail sales excluding automobiles are expected to increase 0.3% in November, after a 0.2% rise in October.

The U.S. PPI is expected to be flat in November, after a 0.4% drop in October.

The U.S. producer price inflation excluding food and energy is expected to rise 0.1% in November, after a 0.3 fall in October.

The preliminary Thomson Reuters/University of Michigan consumer sentiment index is expected to rise to 92.0 in December from a final reading of 91.3 in November.

The euro traded higher against the U.S. dollar after the release of the economic data from the Eurozone. Destatis released its final consumer price data for Germany on Friday. German final consumer price index were up 0.1% in November, in line with the preliminary estimate, after a flat reading in October.

On a yearly basis, German final consumer price index rose to 0.4% in November from 0.3% in October, in line with the preliminary estimate.

The increase was partly driven by a slower decline in energy prices and higher food prices, which dropped 7.5% year-on-year in November, while food prices climbed 2.3%.

Consumer prices excluding energy increased 1.3% year-on-year in November.

The Bank of France released its current account data on Friday. France's current account deficit was €1.4 billion in October, down from a surplus of €0.3 billion in September. September's figure was revised down from a surplus of €0.5 billion.

The British pound traded mixed against the U.S. dollar. The Office for National Statistics (ONS) released its construction output data for the U.K. on Friday. Construction output in the U.K. rose 0.2% in October, after a 0.2% drop in September.

New housing activity jumped 1.5% in October, while all new work rose 1.2%.

Repair and maintenance work slid 1.5% in October.

On a yearly basis, construction output climbed 1.0% in October, after a 0.3% decrease in September.

The Bank of England (BoE) released its quarterly survey on Friday. Consumer inflation expectations for the coming year in the UK remained unchanged at 2.0% in December.

Inflation expectations for coming two years in the U.K. climbed to 2.9% in December from 2.8% in August.

The consumer price inflation in the U.K. was -0.1% in October, below the central bank's 2% target.

EUR/USD: the currency pair rose to $1.0977

GBP/USD: the currency pair declined to $1.5110

USD/JPY: the currency pair decreased to Y121.28

The most important news that are expected (GMT0):

13:30 U.S. Retail sales November 0.1% 0.3%

13:30 U.S. Retail Sales YoY November 1.7%

13:30 U.S. Retail sales excluding auto November 0.2% 0.3%

13:30 U.S. PPI excluding food and energy, m/m November -0.3% 0.1%

13:30 U.S. PPI excluding food and energy, Y/Y November 0.1% 0.2%

13:30 U.S. PPI, m/m November -0.4% 0%

13:30 U.S. PPI, y/y November -1.6% -1.4%

15:00 U.S. Business inventories October 0.3% 0.1%

15:00 U.S. Reuters/Michigan Consumer Sentiment Index (Preliminary) December 91.3 92

15:35 United Kingdom MPC Member Weale Speaks

EUR/USD

Offers 1.1000 1.1025-30 1.1050 1.1080 1.1100 1.1130 1.1150

Bids 1.0925-30 1.0900 1.0880 1.0865 1.0850 1.0825-30 1.0800

GBP/USD

Offers 1.5200-10 1.5225 1.5245-50 1.5270 1.5285 1.5300 1.5330 1.5350

Bids 1.5120-25 1.5100 1.5080 1.5065 1.5050 1.5030 1.5000 1.4985 1.4965 1.4950

EUR/GBP

Offers 0.7250 0.7275-80 0.7300 0.7320 0.7350 0.7375 0.7400

Bids 0.7200 0.7180 0.7165 0.7150 0.7130 0.7100

EUR/JPY

Offers 133.85 134.00 134.20-25 134.50 134.75 135.00 135.50 136.00

Bids 133.00 132.75 132.50 132.00 131.50 131.00

USD/JPY

Offers 122.20-25 122.50122.85 123.00 123.20-25 123.50

Bids 121.25-30 121.00 120.85 120.65 120.50 120.30 120.00

AUD/USD

Offers 0.7260 0.7300 0.7320-25 0.7345-50 0.7375 0.7400 0.7425

Bids 0.7200 0.7185 0.7165 0.7150 0.7130 0.7100

The European Central Bank (ECB) said on Friday that banks borrowed €18.3 billion in loans, the so-called TLTROs, compared to the previous allotment of €15.6 billion.

The ECB is offering banks the loans as part of its stimulus measures to spur Eurozone's economy and to boost inflation to its 2% target.

The ECB said there were 55 bidders for this week's TLTROs.

The Bank of England (BoE) released its quarterly survey on Friday. Consumer inflation expectations for the coming year in the UK remained unchanged at 2.0% in December.

Inflation expectations for coming two years in the U.K. climbed to 2.9% in December from 2.8% in August.

The consumer price inflation in the U.K. was -0.1% in October, below the central bank's 2% target.

The Italian statistical office Istat released its industrial production data on Friday. Industrial production in Italy increased at a seasonally-adjusted rate of 0.5% in October, after a 0.2% rise in September.

Output of consumer goods climbed 1.6% in October, output of intermediate goods were up 0.9%, output of investment goods rose 0.6%, while output of energy dropped 0.7%.

On a yearly basis, industrial production in Italy jumped at a seasonally-adjusted rate of 2.9% in October, after a 1.8% increase in September.

Output of capital goods jumped 4.8% year-on-year in October, while output of intermediate goods climbed 2.4%.

The Office for National Statistics (ONS) released its construction output data for the U.K. on Friday. Construction output in the U.K. rose 0.2% in October, after a 0.2% drop in September.

New housing activity jumped 1.5% in October, while all new work rose 1.2%.

Repair and maintenance work slid 1.5% in October.

On a yearly basis, construction output climbed 1.0% in October, after a 0.3% decrease in September.

Construction makes up around 6% of UK's economy.

The Bank of France released its current account data on Friday. France's current account deficit was €1.4 billion in October, down from a surplus of €0.3 billion in September. September's figure was revised down from a surplus of €0.5 billion.

The trade goods deficit widened to €3.0 billion in October from €1.9 billion in September, while the surplus on services fell to €1.1 billion from €1.8 billion.

The surplus on financial account climbed to €18.4 billion in October from €10.3 billion in September.

The German statistical office Destatis released its wholesale prices for Germany on Friday. German wholesale prices fell 0.2% in November, after a 0.4% decrease in October.

On a yearly basis, wholesale prices in Germany dropped 1.1% in November, after a 1.6% decline in October. Wholesale prices have been declining since July 2013.

The fall was mainly driven by a 13.3% drop in solid fuels and related products.

Destatis released its final consumer price data for Germany on Friday. German final consumer price index were up 0.1% in November, in line with the preliminary estimate, after a flat reading in October.

On a yearly basis, German final consumer price index rose to 0.4% in November from 0.3% in October, in line with the preliminary estimate.

The increase was partly driven by a slower decline in energy prices and higher food prices, which dropped 7.5% year-on-year in November, while food prices climbed 2.3%.

Consumer prices excluding energy increased 1.3% year-on-year in November.

According to data from the Bloomberg Consumer Comfort Index, consumers' expectations for U.S. economy increased to 40.1 in in the week ended December 06 from 39.6 the prior week. The increase was driven by a more favourable assessment of the measure of views of the economy and buying climate.

The measure of views of the economy rose to 31.7 from 30.6.

The buying climate climbed to 35.3 from 34.5.

The personal finances index fell to 53.4 from 53.7.

The U.S. Treasury Department released its federal budget data on Thursday. The budget deficit increased by $65.0 billion in November, beating expectations for a rise by $68.0 billion, after a $136.0 billion growth in October.

The budget deficit rose due to a rise in spending in Social Security, Medicare and defence. Social Security spending climbed 4%, Medicare spending jumped 9%, while spending on defence increased 2% from last year.

In the first two months of the fiscal year 2016, which ends at September next year, the budget deficit totalled $201.1 billion, 12.6% higher than a year ago.

EUR/USD: $1.0700(E442mn), $1.0800(E440mn), $1.0850(E314mn), E$1.0900(E991mn), $1.0930-35(E364mn), $1.0950(E225mn), $1.1000(E1.61bn)

USD/JPY: Y121.20-25($750mn), Y122.00($865mn), Y123.50($250mn), Y124.00($351mn)

GBP/USD: $1.5200(Gbp923mn)* EUR/GBP Gbp0.7000(E315mn), Gbp0.7200(E234mn)

USD/CHF: Chf0.9800($200mn)* EUR/CHF Chf1.0900(E468mn)

AUD/USD $0.7050(A$422mn), $0.7195-0.7200(A$1.582bn), $0.7225-30(A$1.33bn), $0.7300(A$331mn)

AUD/NZD: NZ$1.1000(A$790mn) * NZD/USD: $0.6775-81(NZ$475mn), $0.6800(NZ$319mn)

USD/CAD: C$1.3600($1.01bn)

EUR / USD

Resistance levels (open interest**, contracts)

$1.1109 (4184)

$1.1063 (5104)

$1.1028 (2776)

Price at time of writing this review: $1.0942

Support levels (open interest**, contracts):

$1.0856 (1319)

$1.0802 (1782)

$1.0737 (5504)

Comments:

- Overall open interest on the CALL options with the expiration date January, 8 is 52000 contracts, with the maximum number of contracts with strike price $1,1100 (6357);

- Overall open interest on the PUT options with the expiration date January, 8 is 65155 contracts, with the maximum number of contracts with strike price $1,0450 (7907);

- The ratio of PUT/CALL was 1.25 versus 1.24 from the previous trading day according to data from December, 10

GBP/USD

Resistance levels (open interest**, contracts)

$1.5403 (950)

$1.5306 (1051)

$1.5210 (831)

Price at time of writing this review: $1.5140

Support levels (open interest**, contracts):

$1.5090 (3090)

$1.4994 (1814)

$1.4896 (1533)

Comments:

- Overall open interest on the CALL options with the expiration date January, 8 is 15890 contracts, with the maximum number of contracts with strike price $1,5100 (2483);

- Overall open interest on the PUT options with the expiration date January, 8 is 16794 contracts, with the maximum number of contracts with strike price $1,5100 (3090);

- The ratio of PUT/CALL was 1.06 versus 1.07 from the previous trading day according to data from December, 10

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

The U.S. dollar rose against the yen on expectations of a looming U.S. rate hike next week. Several times Fed Chair Janet Yellen pointed to a possibility of a liftoff in interest rates at December meeting in case of sustained economic growth and lower unemployment rate. Last week data showed that the unemployment rate remained at record-low 5% in November, while the number of employed outside the farming sector rose by 211,000. Higher rates would boost the dollar.

Today market participants are waiting for data on U.S. retail sales. A median forecast suggests that the corresponding index remained unchanged in November after a 0.4% rise in the previous month.

The New Zealand dollar traded near yesterday's high. The currency advanced in the previous session after the Reserve Bank of New Zealand cut its benchmark interest rate by 25 basis points to 2.5% and signaled that this was the last rate cut in the current cycle.

EUR/USD: the pair fluctuated within $1.0925-45 in Asian trade

USD/JPY: the pair rose to Y122.25

GBP/USD: the pair fell to $1.5135

The most important news that are expected (GMT0):

(time / country / index / period / previous value / forecast)

07:00 Germany CPI, m/m (Finally) November 0.0% 0.1%

07:00 Germany CPI, y/y (Finally) November 0.3% 0.4%

09:30 United Kingdom Consumer Inflation Expectations 2%

10:15 Eurozone Targeted LTRO 15.5

13:30 U.S. Retail sales November 0.1% 0.3%

13:30 U.S. Retail Sales YoY November 1.7%

13:30 U.S. Retail sales excluding auto November 0.2% 0.3%

13:30 U.S. PPI excluding food and energy, m/m November -0.3% 0.1%

13:30 U.S. PPI excluding food and energy, Y/Y November 0.1% 0.2%

13:30 U.S. PPI, m/m November -0.4% 0%

13:30 U.S. PPI, y/y November -1.6% -1.4%

15:00 U.S. Business inventories October 0.3% 0.1%

15:00 U.S. Reuters/Michigan Consumer Sentiment Index (Preliminary) December 91.3 92

15:35 United Kingdom MPC Member Weale Speaks

(pare/closed(GMT +2)/change, %)

EUR/USD $1,0940 -0,77%

GBP/USD $1,5159 -0,13%

USD/CHF Chf0,9876 +0,47%

USD/JPY Y121,55 +0,09%

EUR/JPY Y133,00 -0,65%

GBP/JPY Y184,24 -0,04%

AUD/USD $0,7279 +0,71%

NZD/USD $0,6752 +0,49%

USD/CAD C$1,3623 +0,33%

(time / country / index / period / previous value / forecast)

7:00 Germany CPI, m/m November 0.0% 0.1%

07:00 Germany CPI, y/y November 0.3% 0.4%

09:30 United Kingdom Consumer Inflation Expectations 2%

10:15 Eurozone Targeted LTRO 15.5

13:30 U.S. Retail sales November 0.1% 0.3%

13:30 U.S. Retail Sales YoY November 1.7%

13:30 U.S. Retail sales excluding auto November 0.2% 0.3%

13:30 U.S. PPI excluding food and energy, m/m November -0.3% 0.1%

13:30 U.S. PPI excluding food and energy, Y/Y November 0.1% 0.2%

13:30 U.S. PPI, m/m November -0.4% 0%

13:30 U.S. PPI, y/y November -1.6% -1.4%

15:00 U.S. Business inventories October 0.3% 0.1%

15:00 U.S. Reuters/Michigan Consumer Sentiment Index (Preliminary) December 91.3 92

15:35 United Kingdom MPC Member Weale Speaks