1. UK Manufacturing & Industrial Production
2. BoE Rate Decision
3. Canadian Ivey Purchasing Managers Index

UK Manufacturing Production (MoM) (AUG) (8:30 GMT, 4:30AM EDT)
Consensus: 0.1%
Previous:  0.1%

UK Industrial Production (MoM) (AUG) (8:30 GMT, 04:30AM EDT)
Consensus: 0.2%
Previous:  -0.3%

Outlook: August is expected to have produced another 0.1percent increase in manufacturing along with a 0.2 percent rise in total industrial output. With the economy slowly coming out of its slump and lower borrowing costs, it is possible for production to have achieved this gain. However, the Confederation of British Industry's industrial trends survey has shown very low levels of orders in the past few months with August's order books balance hitting a 22-month low of -29 while September only made a small recovery to -27. In addition to lackluster domestic demand, August and September were hurt by weak exports as a result of the pound's sharp appreciation in those two months. In non-manufacturing, it is highly likely that mining output slows down yet again. Looking at coal production figures from the Department of Trade and Industry, August has been the slowest month for every single year since 1996 with an average monthly drop in production of 25.3 percent. Meanwhile the historic average change in oil output between July and August is -9.9 percent. Given these facts, a downside surprise is probably more likely than a better-than-expected final figure.

Previous: In July, manufacturing output increased by 0.1% while total industrial production actually fell by 0.3 percent. The advancement in manufacturing, though better than expected and also the fourth consecutive month of growth, is not indicative of broadly better performance. Less than half of the thirteen subsectors showed increases in while the rest actually reported declines in production. Most of this 0.1 percent increase can be attributed to a sizeable 8.4 percent jump in the motor vehicle industry following two months of weaker figures. This result was achieved even though the Confederation of British Industry reported the lowest level of factory orders since October 2003 in a report published on June 23rd. Despite having a good run for several months, weak orders will eventually mean that production will slow. Total production fared a lot worse in July with a decrease in output of 0.3 percent mostly due to volatility in certain non-manufacturing industries. Mining output fell 3 percent with drops seen in the extraction of oil, gas, and coal.

BoE Rate Decision (October 6) (11:00 GMT, 07:00AM EDT)
Consensus: 4.50%
Previous: 4.50%

Outlook: The 40 economists surveyed by Bloomberg unanimously agree that the Bank of England will have decided to keep interest rates at 4.50 percent in their latest meeting. The economy hasn't shown much improvement since the last decision, which was a 25 bp rate cut. Likewise, the housing market seems to have peaked with many private industry groups, including the Royal Institution of Chartered Surveyors, Rightmove, and the Nationwide Building Society, citing lower prices in August and September. On the other hand, the latest data shows that inflation has continued to grow, hitting an annual pace of 2.4 percent in August, up from 2.3 percent in July. September figures may show an even higher price growth rate with the surge in oil prices that occurred following the destructive hurricanes which hit the oil industry in the Gulf of Mexico. However, in light of other changes in the economy, the Monetary Policy Committee will most likely regard inflation risks as temporary and hold interest rates to continue giving stimulus to the economy.

Previous: On September 8th, the Bank of England held interest rates at 4.50 percent after having made the first rate cut in over two years. In the discussion, it was decided that a more accommodative strategy was optimal at this juncture because of the output slowdown while inflation risks were regarded as a less consequential danger for the economy in the medium term. The Committee cited past trends in inflation expectations and wage changes, which indicated that it was unlikely for oil prices or even CPI inflation to turn into equivalent growth in wages, which is the real underlying cause of inflation. It is this lack of wage growth along with the "gentle softening" in the labor market which is behind the sluggish consumers demand despite second quarter's slightly improved GDP growth, which was revised up to 0.5 percent. The export picture also looks to be weaker in the third quarter after the sharp appreciation of the pound in August and September. With this in mind, the committee determined that a lower benchmark rate was appropriate for the time being.

Canadian Ivey Purchasing Managers Index (SEP) (14:00 GMT, 10:00AM EDT)
Consensus: 57.0
Previous: 54.1

Outlook: The measure of purchasing manager activity for the month of September is expected to improve for the second month to 57.0, from August's read of 54.1, hinting that strength in exports and consumer demand is stimulating business investment.  Ripples from the two hurricanes that hit the U.S., Canada's largest trading partner, have proven to be both beneficial and burdensome for the world's eighth largest economy.  While skyrocketing crude oil prices have created huge profits for exporters, they have also forced Canadian's to pay more at the gas pump, depressing domestic demand.  Managers also have to take on the added cost of higher energy prices, but so far they have been able to pass on the added burden to the consumer.  The detrimental effects of Hurricane Katrina and Rita on the Canadian economy should be over soon however according to a recent statement from the Finance Minister Ralph Goodale.  In the statement, Goodale echoed a Bank of Canada statement that said he expected the economy to rebound by early 2006 from the impact of Katrina.  Further supporting a rise in manager's optimism should be the BoC's decision to increase the benchmark lending rate.  Officials decided on September 9th to increase the overnight lending rate 25 basis to 2.75 percent as the strong governmental outlook on the economy allows for focus to be shifted to inflationary pressures.

Previous:  August's Ivey PMI number improved to 54.1 after falling to the lowest level in a year in July.  August's post was the 25th straight month of expanding or remaining stable.  Figures above 50 indicate purchasing increased.  Managers picked up the pace in buying through the month as optimism rode high on expectations of stronger than previously expected economic growth assist healthy demand for key Canadian exports.  Strong foreign demand for Canadian goods has carried the economy through periods of faltering domestic spending.  Exports of automobiles to the U.S. surged over the month with a healthy bout of demand coming from dealers' using strategies to move cars.  Oil also played its hand.  Crude prices neared $70 per barrel in August and exporters of the volatile liquid reaped the reward.

Richard Lee is a Currency Strategist at FXCM.