1. Japanese Household Spending
2. German Industrial Production
3. Canadian Unemployment

Japanese Overall Household Spending (MoM) (AUG) (5:00 GMT, 1:00 EDT)
Consensus: N/A
Previous: -4.2%

Outlook: Household spending in Japan is expected to have dropped 1.5 percent in August from August 2004.  Although a drop, it is not nearly as dramatic as the year-over-year fall of 3.7 percent seen in July.   Japan's suffering economy shifted in August with a score of positive numbers most likely fueling higher consumer confidence and signally more consumer spending after Bank of Japan policy makers hinted that it may abandon the policy of holding interest rates close to zero as soon as early 2006.  Industrial output was up 1.2 percent from July to August.  Unemployment fell from 4.4 to 4.2 percent in the same period with retail sales were higher by 1.5 percent.  Additionally, a separate government survey indicated that spending in households led by a salaried worker rose by 3.2 percent from July to August.  Surveys also showed that business owners and manufacturers were more confident during August than in previous months.

Previous: Average household spending fell 3.7 percent in July from the same month a year earlier and fell 4.2 percent (seasonally adjusted) from June to July.  According to Japanese economists, these drops were partially due to a poor sample, being that consumer confidence numbers were up for the month, and that spending for the month was not actually as bad as the figures had indicated.  The decline did fall in line with data for salaried workers' households, another key indicator of consumer spending in the country.  Regardless of the numbers, the quarter did undoubtedly get off to a bad start with the drop being led by a decline in automobile purchases.  The decline can be mainly attributed to high energy costs finally beginning to have a damaging impact on consumer budgets in July after a few months of elevated prices.

German Industrial Production (MoM) (sa) (Aug P) (10:00GMT, 6:00 EDT)
Consensus: -0.5%
Previous: 1.2%

Outlook: German industrial production is expected to have fallen 0.5 percent from July to August, remaining stagnant from August 2004, after an unexpected jump in July.  Indicators for the German economy are not as positive for August as they were for the previous month, but economists are not as troubled by this drop, being that it follows after a much larger bounce.  In August, factory orders in Germany fell 3.7 percent, 1.4 percent more than expected, after jumping 4.1 percent in July.  Orders for consumer goods also fell 6.8 percent from July to August, and retail sales unexpectedly fell for the third month, dropping 0.8 percent versus the expectation of a 0.4 percent rise.  Spending was tight during the month due to record oil prices on top of record unemployment.  Unemployment rose 0.1 percent in August, although predicted to stay steady, to 11.7 percent, the highest level since January of this year and close to the highest since World War II.  Although foreign demand is still strong, with German automobile exports rising 6 percent in August, slouching domestic demand is slowing the progress of economic recovery.

Previous: Industrial production was higher by 1.2 percent from June to July, surprising economists who predicted a 0.3 percent decline.  This is the third rise in four months indicating that the German economy is coping with rising energy prices and that it may be returning to growth.  The fall of the Euro against the dollar over the year has made German exports more competitive abroad and helping to ease the effects of high energy costs on production.  Subsequently, demand for exports actually pushed German manufacturing orders to its biggest increase in July.  The rise in production was led by a 2 percent increase in production of consumer goods and a large rise in export demand, especially from China whose economy is also beginning to pick up. 

Canadian Unemployment Rate (SEP)(11:00 GMT, 7:00 EDT)
Outlook: 6.8%
Previous: 6.8%

Outlook: Canada's unemployment rate is expected to come in at 6.8% for September, the third straight month of static unemployment.  The reason for such stagnation is a balancing act between job losses in manufacturing and employment gains in construction.  In order to recuperate from soaring energy prices in the past months, many manufacturers have been limiting operations and product lines and are expected to continue with such cost reducing measures, resulting in heavy job cuts.  On the flip side, oil and mining companies profiting from high prices are increasing investment in new construction, creating a mass of new jobs in that sector.  Employment gains in the services sector is expected to remain flat, reducing their impact on the unemployment rate.  Provided that employment gains in construction continue to net out losses in manufacturing, Canada's unemployment rate will remain unchanged for September.

Previous: The Canadian Unemployment Rate registered at 6.8% in August, identical to the unemployment rate from the previous month.  A significant number of jobs were cut in the manufacturing sector as a result of steep energy costs.  Job losses were also posted in the agricultural and information, culture, and recreation sectors.  However, these losses were counterbalanced by huge employment gains in construction, an industry that has seen marked growth in Canada at the hands of a housing boom supported by low interest rates.  While economists predicted about 20,000 jobs to be added in the Canadian economy in August, the overwhelming number of jobs gained in construction boosted the actual increase to 27,500.  The increase in employment came from full-time work, which has been responsible for all of Canada's employment gains in the past year.

Richard Lee is a Currency Strategist at FXCM.