• Swiss GDP
• UK CIPS Manufacturing PMI
• ECB Rate Decision
• US ISM Manufacturing

Swiss GDP (SA) (QoQ) (Q3) (6:45GMT; 1:45EST)
Consensus:    0.5%
Previous:       0.3%

Outlook: Economic output looks to pick up strength in Switzerland as the nation's Gross Domestic Product is expected to increase by 0.5 percent in the third quarter at the hands of improved capacity utilization, which means that Swiss companies have been making better use of available inputs and labor.  According to a poll by Zurich's Institute for Business Cycle Research (KOF), output in the most recent three-month span has been strong in the industrial, construction, and financial services sectors.  Growth in the hospitality industry, however, will be less apparent as overnight stays in hotels are likely to have increased while restaurants may show lower revenues in the third quarter.  Manufacturing growth and decreased unemployment in the month of October suggest that Switzerland's export-led economic growth may have promoted investment and consumption in the third quarter. 

Previous: Switzerland's GDP grew at a rate of 0.3 percent in the second quarter lead by strong demand for Swiss exports.  The Swiss franc's 10 percent decline against the U.S. dollar thus far this year has made exports from companies such as ABB Ltd., the world's largest producer of power transformers, considerably cheaper.  The company's profits picked up significantly in the second quarter at the hands of massive demand from foreign oil refineries.  Although the nation's recent economic growth spurt has resulted largely from exports, there is a possibility that this growth may begin to take shape on the domestic front as well.  If the surge in exports encourages hiring and capital expenditures, the Swiss domestic economy will begin to see similar growth. 

UK CIPS Manufacturing PMI (NOV) (9:30GMT; 4:30 EST)
Consensus:    51.8
Previous:       51.7

Outlook: Analysts believe that the UK manufacturing sector expanded at a faster rate this month than last month.  A survey of Bloomberg analysts suggests that November PMI numbers will check in at 51.8 - higher than the 51.7 in October.  A reading above 50 suggests the manufacturing sector is expanding and a reading below 50 suggests the sector is contracting.  Manufacturers continue to face the squeeze of shrinking profit margins as oil and raw material prices rise faster than consumer prices.  So far this year, monthly percent increases in producer prices have been 1.12 percent compared to an average rise of consumer prices of 0.18 percent.  According to a report released earlier this month, October producer prices increased 0.3 percent on a month-over-month basis while consumer prices increased at just 0.1 percent.  Analysts were expecting a 0.0 and 0.2 percent rise respectively.  Additionally, manufacturing production figures recently released showed production was down 0.3 when they were expected to rise 0.3 percent, suggesting that any surprise to November PMI numbers would be on the down side.

Previous: UK Manufacturing PMI surprised analysts last month, rising to a 22-month high of 51.7 from 51.5 in September; a survey suggested PMI would fall to 51.0.  With recent strong readings, many are hoping the British manufacturing sector can sustain modest expansion.  During the past year, the sector has been left in the dust as a strong pound, higher prices, and a general macroeconomic shift to the services sector took their toll on manufacturers.  Manufacturing growth was a huge debate during Prime Minister Tony Blair's reelection campaign.  Blair promised to turn the sector around during his current and final term.

ECB Rate Announcement (13:30GMT, 08:30 EST)
Consensus:    2.25%
Previous:       2.00%

Outlook:  After 32 consecutive months of keeping the European Central Bank's overnight lending rate at a historical 2.00-low, policy makers are expected to finally increase rates.  This hawkish policy shift is not only unusually because of the long absence of changes, but also because the possible hike from the Governing Council has been publicized so vociferously.  Upon being questioned of how open the bank is being about the upcoming decision, Bank Governor Trichet said he was attempting to maintain the ECB's transparency since the bank “has always been very predictable in its interest rate decisions.”  While the increase is seemingly just short of assured, a few issues do remain unclear.  One of the most frequently raised questions is whether their will be a series of interest rate hikes that will be sparked by December 1st's decision or if the increase will be a one time occurrence.  Trichet has said either position will be determined by price stability.  Price solidity is the ECB's chief factor when they decide rate policy.  Critics to an increase to the lending rate at the meeting have pointed to fragile growth and relatively low inflation.  Growth in the Euro area was soft in the first two quarters, 1.2 percent on an annual basis.  Inflation has been the more glaring issue.  Core Euro-zone inflation (excluding energy prices) remains well below 2 percent, while the same measure for the three largest economies that share the euro has also been firmly below 2 percent.  Unless second round effects from volatile energy prices materialize, a hawkish move at the meeting could prove to be premature in hindsight.

Previous:  On November 3rd, the European Central Bank left interest rates at 2.00 percent yet again, but ECB President Trichet's introductory statement grew even more hawkish. Again, he stressed strong vigilance towards prices, noting that consumer price inflation reached far beyond the Bank's target of 2 percent after the HICP hit 2.6 percent in September. While the wage growth has not yet posed a threat to medium-term inflation stability, Trichet noted possibly larger pass-through effects than were previously assumed. Perhaps more interestingly, following the prepared statement, the question and answer session that followed contained multiple instances in which Trichet explicitly said that the Committee could “move at any time”. In answering a subsequent question, he also assured the audience that the economy would be able to withstand a rate hike as evidenced by recent PMI surveys of various sectors. He did acknowledge that consumption has been faltering, but conceded that this was not enough to prevent the Committee from raising rates if all other factors supported a rate hike. The tone carried in the statement was certainly hinting towards a rate hike sometime soon, which many believe to be as early as next month.

US ISM Manufacturing (NOV) (15:00GMT, 10:00 EST)
Consensus:     58.0
Previous:        59.1

Outlook:  Activity in US manufacturing is expected to fall once again according to the consensus among economists.  A read of 58.0 is expected from the survey of 400 business managers across the US.  Any report above 50 indicates growth.  Related indicators released prior to the ISM report offer a mixed bag for where national survey from the Institute for Supply Management may go.  Endorsing a drop in US manufacturing where drops in both the Chicago PMI and Philly Fed.  The Philadelphia Federal Reserve Bank reported a drop in its index to 11.5 in November from 17.3 on the back of a drop in new orders, while a surprising dip in prices paid and subsequent rise in employment showed promise.  The Chicago read was less optimistic despite a more reserved decline to 61.7 against expectations of 60.0.  The most unnerving component from the indicator came out of the prices paid gauge which jumped to a 26-year high 94.1 for the month, stoking concerns of inflation for the Midwest region that could shortly spread to the rest of the country.  Challenging assertions that the national figure will fall in November finds support from the volatile Empire index and the Federal Reserve released Beige Book.   The New York region's Empire Index revealed business managers in the area were more optimistic in November causing the read to rise to 22.82 in November as demand side indicators picked up and prices continued to ease as companies were able to better pass on costs.  The less direct beige book, covering the months of October and November, reported that optimism around employment and retail sales was increasing; which will spur demand for manufactured goods in coming months.

Previous:  US manufacturing slowed to 59.1 in October from 59.4 in September, the fastest pace of expansion in over a year.  Business managers for the month reported declines in both the new orders component as well as the one for new export orders, while prices paid rose to its highest level since May of 2004.  New orders, which account for a third of the total of the ISM manufacturing index, fell to 61.7 from 63.8 as consumers and business manager confidence contracted.  The Conference Board measure of consumers' optimism fell to a two-year low in October, while a subsequent indicator of business confidence from the same company fell in the third quarter to its lowest level in nearly four years.  Chief among explanations for the cooling optimism are energy prices for both reads.  Following the damage to the Gulf Coast by Hurricanes Katrina and Rita, energy prices reached all-time highs.  With the cold-weather season right around the corner, there is hesitation in spending from managers and consumers in case more income needs to be diverted to another round of higher energy bills.  This caution in spending has translated into fewer new orders for manufacturers in October.  The prices paid gauge was the biggest surprise for the month.  With crude oil prices becoming an increasing burden to companies' bottom lines, the index of prices paid rose to 84 in October from 78 the month before.  Despite these two large detractors from the overall read, there were hints of hope for the future.  The silver lining came from both the employment index's rise to 55 from 53.1, while a drop in business inventories in the third quarter to the lowest level since 2001 provided promise of another round of increased orders.

Richard Lee is a Currency Strategist at FXCM.