1. Japanese Household Spending
2. Canadian Unemployment Rate
3. U.S. Non-Farm Payrolls

Japanese Household Spending (YoY) (FEB) (05:00 GMT; 00:00 EST)
Consensus:          -2.9%
Previous:               0.8%

Outlook:   After a month of improvement, household spending in Japan isexpected to worsen by 2.9% in January from the same month a year ago. Sentiment that spending will decrease is supported heavily by recent softening in Japan's labor market.  The nation's jobless rate jumped back up to 4.5% in January from December's improvement to 4.4%.  Additionally, cash earnings on an annual basis increased a mere 0.1%.  This is a marked regression from the previous month's annual cash earnings gain of 1.6%.  Not only did the percentage of employed Japanese decline over January, but wages earned by those that were employed for the month made only minimal increases.  Perhaps the strongest indicator supporting thoughts that overall spending will show a decline over January is the month's 4.7% decline in expenditures made by households led by at least one worker.  Such an anemic rate of spending as the one estimated for January, if sustained for a longer period, could impede upon the Bank of Japan's hopes of tightening monetary policy in the near future.

Previous:   Household spending increased in December 2005 from the same month in 2004 by 0.8%.  Much of this rise in spending was in reaction to an improving labor market.  Japan's unemployment rate fell to 4.4% from 4.5%the previous month.  Feeling more secure about employment conditions, this encouraged Japanese consumers to spend with less reservation.  More importantly, from the same time in 2004, worker's cash earnings increased a rapid 1.6% over December, which was a significantly faster rate of growth than November's increase of just 0.1%.  The extra cash translated directly into increased spending over the month.  Also, consumer prices made only slight gains, growing at a rate of 0.2% in December as opposed to 0.1% in November.  The combination of a stronger labor market and only minimal gains in prices gave consumer spending a necessary boost.  BoJ policymakers welcomed the jump in expenditures as they look for more reasons to begin shifting away from a 0% interest rate policy.

Canadian Unemployment Rate (FEB) (12:00 GMT; 07:00 EST)*
Consensus:          6.6%
Previous:              6.6%

Outlook:  February's jobless rate is expected to have held steady at 6.6%last month with continued hiring in the private sector and natural resource producers offsetting the reversion of the previous month's surge in government jobs and the ongoing struggle in manufacturing companies.  New hires associated to the government surged in January as temporary positions at polling stations around the nation for the federal election needed to be filled quickly.  Along with this uncommon occurrence, the sudden cold snap that was ushered in with the month of February likely slowed the pace of
hiring for construction and other such service-based occupations.   The more usual market fluctuations were also met with unfavorable signs.  Raw material prices sank in February as global supplies were buoyed by the fourth quarter flood in demand.  Producers of raw materials have been among the most aggressive hirers over the past half-year with the booming demand for their products and the ability to expand capacity with their ballooning revenues.  The most notable reduction in commodity shipments were of crude oil and the continued contraction in natural gas prices which have lost nearly 50 percent since hitting record highs last year.  Despite all of these bleak factors, Canada's economy continues to run strong and businesses continue to hit capacity restraints.  Employment in the country is likely to stabilize as inflation is tamed and growth steadies from recent fluctuations.

Previous:  Canada's booming economy has not gone unnoticed by its citizens.  In January, employers took on 26,300 new workers but a flood of new Canadians into the available labor pool had actually lifted the jobless rate for a second month in a row to 6.6%.  Among those hired through the period, 16,100 were full-time while 10,200 were temporary.  The irregular increase in temps was partially boosted by the Canadian government taking on 42,800 in January, a portion of which were hired to work on the January 23rd federal election campaign.  Other strong additions to staffing came was seen in the natural resources industry.   Employment in this area has increased 19.2% since 2002 fuelled by the exponential growth of crude and natural gas exports from producers of these respective raw materials.  Aside from these two areas of strong growth, concern remains with the continued trend of layoffs at factories.  Manufactures sacked 41,600 employees in February, the most since 1991, business confidence wanes with a currency at 13 year highs and increased competition from foreign competitors.

US Change In Nonfarm Payrolls (FEB) (13:30 GMT; 08:30 EST)
Consensus:          200K
Previous:              193K

Outlook:  The world's largest economy is expected to have added 200,000 service jobs last month as companies bid for a shrinking labor force with rising profits earned from the strong economy.  February's employment figures are expected to be strong across the board and for good reason.  First-time claims for jobless benefits held under 300,000 for the seventh consecutive week for the period ending February 25th, the longest such string in over four years.  While this claims data is most feverishly being used to divine Nonfarm Payroll data it is also lending itself to forecasts in the jobless rate and wage indicators.  The general consensus for the jobless rate is for a repeat figure of the four-year low 4.7% level, however there is some speculation that their could be another contraction to 4.6% * a low not seen since January 2000.  Labor earnings also have a stake in the payrolls release on expectations of 4.2% growth.  With the housing market loosing its steam, economic growth will be more squarely shouldered by job and wage growth.  When the housing boom was at its peak, spending was fueled by consumers that were comfortable with tapping the equity in their homes.  However, some officials have said the deflating bubble will have less of a damaging effect to the economy than most would expect.  St. Louis Federal Reserve William Poole echoed this in a recent statement in which he said housing prices are "not likely to be a significant concern" as "income and employment growth typically exert greater influence on the consumer's pocketbook."

Previous:  US employers added 193,000 workers to the payroll in January after the gradually improving job market received an additional boost from seasonal influences.  This year's opening month was the warmest January on record which resulted in an unusually large 46,000 construction jobs added for the period.  A considerable jump when compared to the much fewer 5,000 workers taken on in December.  Another side effect of this one-time event was the contraction in the unemployment rate to 4.7% from 4.9 the month before. However, excluding this extraordinary increase in this specific industry, general strength in the employment arena was evident through other economic indicators.  Along with the rise in jobs, wages have also accelerated suggesting employers are not just hiring for temporary assignments.  The strength in the labor market has already relieved consumer confidence that had lost some of its potency Hurricane Katrina struck the gulf coast and gasoline and heating oil prices rose to record highs.  Optimism was at a three and a half year high in January.  Business' willingness to invest more into the shrinking labor pool is also providing inflationary pressures for the FOMC to consider.  As spare capacity shrinks in the economy, price growth in consumer goods is triggered as producers shift along rising prices of material and labor back into the market.

Richard Lee is a Currency Strategist at FXCM.