1. Euro-Zone GDP
2. US Trade Balance
3. US Import Price Index

Euro-Zone GDP s.a. (QoQ) (2Q2) (08:00 GMT, 05:00 EDT)
Consensus:         0.3%
Previous:        0.4%

Outlook:  The second read of economic expansion for the three months ending in June is expected to come in at 0.3 percent, unchanged from the preliminary measure.  Growth in the dozen nations sharing the euro slowed from 0.5 percent in the first quarter as energy prices and rampant joblessness weighs on the member economies.  Unemployment for the whole community remained near five-year highs at 8.8 percent through the quarter - double that of the U.S. and U.K. - while also keeping lofty among the largest member countries.  The jobless rate held at 10.2 percent in the beginning of the quarter for France, near the historical high set in 1999; and the number of unemployed in Germany was near a post WWII record at 11.8 percent.  The high number of unemployed throughout the region has further led to diminished confidence among consumers.  European's optimism fell to -15 through the second quarter resulting in the fifth month of falling retail sales in six for of June.  Another direct factor leading to slowing growth was oil prices over the period.  The price for crude surged towards the end of the quarter above $60 per barrel.   Higher energy prices weighed on consumers who had to deal with the added costs, while also having to endure more expensive prices of goods as producers looked to pass on their share of the growing bills. 

Previous:  European growth accelerated in the first quarter to 0.4 percent from 0.2 percent expansion in the last three months of 2004.  Leading the pack for the twelve nations sharing the euro was Germany, the community's largest economy, which made a strong come back from a 0.1 percent contraction from the final quarter of last year.  German growth surged 1.0 percent in the first quarter, the fastest pace since 2001, supported by a spike in demand for the countries exports.   However, the member's country probably played a role in skewing the overall read.  Many of the nations comprising the community were suffering through the period as mounting costs squeezed businesses profit margins and capped consumer spending and investment.  Pacing the pack of countries seeing growth contract was Italy.  The region's fourth largest economy sank back into a recession in the first quarter, the second in the past two years.  Cynicism held for most of the countries through the quarter, as leaders looked to the growing price of energy and drooping consumer demand to further burden the region in the months to come.   Some leaders looked to lay their economic woes on the ECB refusing to cut the lending rate from its 2.0 percent, 4-decade low, but the bank remained firm in its decision.

US Trade Balance (AUG) (12:30 GMT, 08:30 EDT)
Consensus:         -$59.5B   
Previous:         -$57.9B       

Outlook:  The US trade deficit is expected to have expanded to the second largest level in history in August.  A consensus among economists holds the bloated deficit at $59.5 billion as prices for imported oil supplements increased domestic demand for foreign goods.  Imports for the past year have more or less been dominated by demand for crude oil.   The price for imported crude rose 7.1 percent for the month of August as worries of escalating demand falls short of dwindling supplies.  Further, demand for imports has remained buoyed among citizens as the pace of growth outstrips its biggest trading partners.  Growth for world's largest economy is on track to expand 3.5 percent for the year, while expected expansion in Japan holds at 2.0 percent and 1.3 percent for the 12 nations sharing the euro.  With expectations of the deficit widening to such a level in August, it does not bode well for the balance of goods and services for the following month.  The effects of Hurricanes Katrina and Rita are likely to have pushed the balance even further in favor of imports.  Besides pushing crude prices to record highs, demand for imported raw materials and crude jumped, the latter due to stunted production capabilities.  Estimates already suggest deficits in the three months ending with September will have eroded 0.4 percentage points from third quarter growth.

Previous: The balance of goods and services unexpectedly narrowed to a $57.9 billion deficit for the month of July as exports rose to record levels to stave off steadily stronger imports.  Exports rose 0.4 percent to $106 billion on a 0.7 percent rise in capital goods and a 2 percent rise in industrial supplies, while imports contracted 0.7 percent paced by a 15.7 percent decline in pharmaceuticals and a 7.6 percent drop in apparel.  Deficits with most of the U.S.'s major trading partners remained intact, however, despite the positive shift for exports.  Import favored balances with Canada and Europe actually grew over the period.  Demand for U.S. goods in Europe has waned over the past few months as economic fallout from the rejection of the French referendum in late May.  Posing more of a problem for the U.S. was the deficit in trade with Canada which rose nearly 15 percent for the month.  Imports of raw materials and oil have dominated trade with the neighbor to the north.  Crude imports account for 64 percent of the total, while prices averaged $49.03 per barrel over the period.  Also of note was the continuing imbalance of trade with China.  Although exports to the behemoth rose to a record in July, a fixed exchange rate has done well to benefit the continuously growing economy.

US Import Price Index (MoM) (SEP) (12:30 GMT, 08:30 EDT)
Consensus:        1.0%
Previous:        1.3%

Outlook:  Import prices are expected to have slowed their pace of growth last month to 1.0 percent despite U.S. consumer prices rising to their highest level in over 14 years.  The index for the average price level of foreign goods is likely to take its cue from crude oil prices that soared to record.  The price per barrel of crude on the New York Mercantile Exchange rose to $70.80 just prior to the beginning of the month and spent the remainder above $60.  Petroleum products received their boost after Hurricane Katrina struck the gulf coast in late August, effectively shutting down a hefty portion of the U.S.'s domestic refinery capacity.  Another contributor to inflated prices likely came from an unfavorable exchange rate.   The dollar dropped significantly against the major currencies in the first half of September, making purchases of foreign goods more expensive.  With all the factors measured, any surprise in the indicator will likely find itself on the higher side of the consensus.

Previous:  Prices for U.S. purchases of foreign goods jumped 1.3 percent in August, the largest increase in five months, following a downwardly revised 0.8 percent increase in the month before.  Energy products once again drug the overall indicator higher for the period.  If measured excluding energy prices, import prices had actually fallen the previous four months.  Crude oil peaked to a historical high on August 30th as estimates of damage to the U.S.'s production capacity remained uncertain.  Prices for all imported goods were 7.6 percent higher for the month, but excluding petroleum, prices were only 1.8 percent higher to mark the smallest annual gain since March.

Richard Lee is a Currency Strategist at FXCM.