US December retail sales due at 1330 GMT (8:30 am ET) on Friday, Jan 15:

There is an old adage in markets: Never underestimate the spending power of the US consumer.

The middle-of-the-month report could mark a turning point in sentiment if US shoppers dig deep into their pockets and deliver another strong month. The holiday shopping season is critical because it's the make-or-break moment for many retailers.

The numbers are seasonally adjusted so there is no spike in December retail sales. With that in mind, sales are expected to edge 0.1% lower overall after a 0.2% rise in November.

Markets pay closer attention to the 'control group'. It's the line in the report that excludes volatile auto sales, gasoline sales and building materials. It's expected to climb a healthy 0.3% after a 0.6% rise in November.

Consumer spending often tracks weather and it was a mild December this year so that could lead to surprisingly strong report.

On the flipside, the US consumer has been showing signs of weakness for a few years now. In year-over-year terms, gains have been fading for years. Part of the reason is that gas prices have declined but it's still a worrisome trend.

The Fed believes better growth and inflation is coming in 2016, that won't happen without the consumer.

What's the trade?

Global markets finally showed some signs of life on Thursday but it's been a dreadful start to the year.

It's tough to pin anything on economic data because non-farm payrolls were very strong and markets cared for about five minutes.

Still, the consumer is more of a focus of the Fed than the jobs market, which is solid and steady.

The trade for me is to go with whatever comes. A weak report should hit USD/JPY particularly hard as risk trades decline and Fed hike expectations are scaled back. A strong report should underpin USD/JPY.

Rather than jumping into the trade, I prefer watching to see how markets react. If USD/JPY gains quickly fade like they did on non-farm payrolls, then I think the trade is to sell. We'll have the analysis in real-time on Friday at Forexlive.