Despite a shaky start to the New Year, European equity markets look set to post their second positive week in succession and look set to open higher this morning, despite a negative close in the US last night as US investors took some profits after some key earnings disappointed. With the US set for a long weekend with Martin Luther King Day on Monday, trading volumes could well be quite choppy during the day given that it is also the third Friday of the month, and therefore triple witching as options and futures come up for expiry. On the economic calendar front the only data of note in the morning session is UK retail sales data for December, while in the afternoon session we finish the week off with a host of US economic announcements for December. The UK economy comes back into focus today particularly in light of the last two weeks of trading updates from the high street, which have seen quite a few winners and quite a few losers. The aggressive discounting seen just before Christmas had raised concerns that the UK consumer appeared reluctant to get out and spend money as the festive period approached. These concerns didn't seem unreasonable given how well UK retail sales have done so far this year against a backdrop of shrinking disposable incomes as average incomes lag well behind inflation. This week's inflation data does seem to suggest that this squeeze could be now starting to ease but nevertheless rising energy prices, amongst other items, may well have curtailed enthusiasm for large scale spending at the end of last year. As things stand the fourth quarter looks set to be the only quarter of 2013 to post no change, or even a negative quarter for retail sales, given the 0.7% decline seen in October and the 0.4% rise seen in November. Throughout 2013 consumers have been remarkably resilient with Q1 net retail sales coming in at 0.9%, Q2 at 1.3% and Q3 at 1%, so a slowdown in Q4 was always quite likely. December retail sales are expected to show a rise of 0.3%, which would signal a significant underperformance for Q4 relative to the rest of the year. Given that the UK consumer makes up over 70% of UK GDP a disappointing number is likely to see some estimates for Q4 GDP growth revised downwards. In the afternoon session investors will be paying close attention to the latest US December industrial and manufacturing production data, which given recent ISM and PMI numbers should come in fairly positive, despite the poor weather, though they aren't expected to be as good as the November numbers. Expectations are for a rise of 0.3% for industrial production down from 1.1%, while housing starts aren't expected to live up to the blow out 22.7% rise seen in November, with expectations of a fall of 9.2%. Building permits are expected to decline 0.2%, a slight improvement on the 3.1% fall in November Michigan consumer confidence for January is expected to improve from 82.5 to 83.5, however given its correlation to recent retail sales data one has to question its relevance. Since October consumer confidence on this measure has improved from lows of 72 to the highest levels seen since last summer, yet retail sales since October have been on a declining path. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.