Awaiting Merkel On Treaty Change, Ezone PPI

Merkel to outline treaty change proposals to Bundestag after last nights Sarkozy speech, Swiss retail sales set to improve, UK Construction PMI slips but remains in expansion territory, Eurozone PPI set to fall, US and CAD employment reports. 5 of Wednesday's 17 Premium trades hit all targets, 1 unfilled, the rest in progress.

Last nights speech by President Sarkozy to the French people outlined the stakes of further economic integration in Europe, saying that without it the Eurozone may break down. He proposed tighter fiscal discipline and oversight of national budgets as a necessary measure to keep the euro together at a time when the French people are deeply suspicious of creeping sovereignty by Brussels. Sarkozy will meet UK PM David Cameron later today.

Angela Merkel appears to hold all the cards here and even though she continues to come under increasing pressure to yield to demands for Eurobonds and ECB intervention she knows that if she were to do so she would be committing political suicide at home, notwithstanding the fact she doesnt have the power to do so, given that any such measures would be illegal under the German constitution. Today the German Chancellor is due to outline her proposals to the German Bundestag with respect to the crisis in Europe and future fiscal integration, treaty changes to ensure budget restraint and penalties, as well as how the ECB and the IMF could be involved in any final solution.

UK November construction PMI slipped to 52.3 from Octobers 53.9.
The figure remains better than yesterdays disappointing manufacturing PMI at 47.6, yet these 2 sectors make up only 20% of the UK economy. Next weeks services PMI will matter greatly.

In more evidence of slowing Swiss figures, October retail sales fell 0.2% y/y from -1.4%.

Due at 10 am GMT, Eurozone October producer prices are expected to weaken further, coming in at 5.6%, down from 5.8%, and raise expectations for further easing next week from the ECB at their last meeting of 2012.

The main focus of the day will be on jobs reports in Canada (Noon GMT) and US (13:30 GMT).