1. Japanese Merchandise Trade Balance
2. Swiss Adjusted Real Retail Sales
3. Euro-Zone CPI
4. Canadian CPI
5. US Philly Fed

Japanese Merchandise Trade Balance - Total (yen) (MAR) (23:50 GMT; 19:50 EST)
Consensus: 735.0B
Previous:  950.4B

Outlook:  The trade surplus held by the world's second largest economy is expected to have trimmed down to 735 billion yen last month as a resurgence in crude prices and a wave of domestic demand helped to offset the flow of goods over international boundaries.  Demand for foreign-produced goods in March was a side effect of a general rise in both business and consumer optimism.  Despite a drop in the national consumer confidence measure for the month, spending by the group seemed to be unfazed with the early department store read for the same month growing 1.4%.   Japanese firms were likely the driving force behind imports.  The leading economic indicator, a measure of business conditions, rose to its second highest level since the beginning of 2000 and small business confidence rallied to a 15 year high.   Previously released gauges of March import and export price changes have revealed a 0.5% and 0.3% contraction in each respectively.  With the economy expanding 5.4% in the final quarter of 2004 and domestic demand likely to support growth for quarters to come, strength in exports would could be the final push needed for Bank of Japan monetary policy officials to finally raise interest rates. 

Previous: Japan's trade balance rebounded to a favorable 950.4 billion yen surplus in February as order delays from January's Lunar New Year holiday helped to pull the measure from the island nations first monthly deficit in five years.  On an annual basis, total exports in February surged 21% from the previous month's measure.  Of that rise, Japan's Asian neighbors, who consume nearly 60% of their exports, imported 23% more Japanese goods, the largest acceleration since the middle of 2004.  Also noteworthy was the 41% increase in exports to China, which was the quickest pace since September of 2003. While both of these numbers can be directly attributed to post-holiday production schedules, imports are finding a basis in other, more enduring factors.  Total imports to Japan jumped 30% from the year before, a 10-year high.  However, in addition to the effects of the holiday, half of the rise is being pegged to purchases of foreign semiconductors and oil.  With the BoJ recently abandoning its ultra-accommodative monetary policy, strong trade conditions will only help to support economic growth and inflation that will eventually move officials to finally raise overnight borrowing rates.
 
Swiss Adjusted Real Retail Sales (YoY) (FEB) (07:15 GMT; 03:15 EST)
Consensus: n/a
Previous: 3.1%

Outlook: Though there is no official market consensus for Swiss retail sales for March, the combination of momentum in consumer confidence-supported domestic spending and a rebound in gasoline and other heating product prices is likely to produce the ninth consecutive month that retail sales has grown.  Consumer spending has steadily improved over the previous months as the jobless rate has fallen to 3.5% of the available labor pool and firms have gradually raised wages in order to attract the fewer available workers.   The Swiss National Bank expects the $260 billion economy to expand 2.0% this year, a result of both strong domestic and foreign demand for Swiss goods and services. With government expectations running high for growth and inflation, the central bank will have little problem justifying a rate hike at each monetary policy meeting for the rest of the year.

Previous: Swiss retail sales rose for the first month in three on an annual basis in January as consumers purchased more food and clothing.  Retail sales, adjusted for inflation, rose 3.1% in January from the same month a year ago.  The largest increase in sales came from that of clothing and shoes, which flew off of store shelves 4.5% faster than the previous period.  Sales of food, drinks and tobacco also revealed a hearty 1.8% rise.  A more optimistic consumer has resulted from a jobless rate near a thee-year low and higher wages.  In fact, Swiss consumers' confidence jumped the most in 30 years in response to the general strength in the domestic economy.  With consumer spending backing ideal export conditions, the SNB will better be able to pursue a monetary policy aimed at containing growth and inflation from getting out of hand.

Euro-Zone Consumer Price Index (MAR) (09:00 GMT; 05:00 EST)
                     (MoM)     (YoY)
Consensus:     0.6%      2.2%
Previous:         0.3%      2.3%

Outlook: Over March, consumer prices in the Euro-Zone are expected to have increased at a rate of 0.6%.  Much of this inflation is likely to result from March's return to higher oil prices.  More importantly, prices are expected to have appreciated by 2.2% from the same time in 2005.  A rate of price inflation greater than 2.0% is regarded by the European Central Bank as too fast.  Earlier this month, the Bank left interest rates unchanged at 2.5%.  The first quarter's accumulation of price inflation, however, may result in much different outcomes in May and June.  With economic expansion anticipated to take on a frenzied pace in coming months, the Bank will be wary of potential disturbances to price stability in the medium term.  Soaring energy prices going into the summer pose the greatest risk to this price stability.  Furthermore, the unrelenting uptrend in precious metals prices may be a signal of
more rapid inflation in the future.  

Previous: The Euro-Zone's Consumer Price Index showed price inflation of 0.3% in February.  Excluding the more volatile components of energy, food, alcohol, and tobacco, the core figure was also 0.3%, suggesting that more stable energy prices in February had little effect on higher prices in general.  Recreation and hospitality goods and services had the largest price gains of the month at 0.9% and 0.6%, respectively. Communications items were the only group in the index that averaged lower prices from January to February.  Within the Euro-Zone, the greatest price inflation occurred in Belgium and Luxemburg, with price inflation in Germany and France also outpacing the average rate at 0.4% each.  From February 2005, prices rose by 2.3%, notably faster than the ECB's acceptable rate of 2.0%.

Canadian Consumer Price Index (MAR) (11:00 GMT; 07:00 EST)
                   (MoM)   (YoY)
Consensus:    0.4%   2.1%
Previous:       -0.2%   2.2%

Outlook: Canada's Consumer Price Index is expected to issue a reading of 0.4% in March, marking a return to higher price inflation due to soaring commodities prices.  However, keeping in mind that the Bank of Canada will be looking to maintain an annual inflation rate of 2.0%, March's expected annual CPI reading of 2.1% is likely to support the BoC's less hawkish stance of late.  The Bank's tightening run was designed to curb the build of inflationary concerns in oil-rich provinces.  Although oil and base metal prices continue to push higher, evidence grows that the Canadian economy may be able to grow without a rapid acceleration in inflation rates.  Economists believe that business expansion and greater employment in western provinces will be offset by a slowdown in manufacturing in the east that has resulted from a strong Canadian dollar in recent years.  As such, the BoC may be able to step away from its tightening policy soon and adopt a softer stance in regards to interest rates. 

Previous: In February, Canadian consumer prices deflated by 0.2%, indicating that the month's stabilization in crude oil prices had the effect of cooling inflation in general.  Gasoline prices, highly dependent on crude oil costs, fell 6.8% over the month.  From the same time in 2005, gasoline prices were 7.4% higher, which was the smallest annual increase since June.  Inflation from February 2005 to 2006 was measured at 2.2% as opposed to the previous month's register of 2.4%. One week prior to the release of February's CPI figures, the Bank of Canada raised interest rates to 3.75%.  However, the Bank also made it clear that it was becoming increasingly uncertain about whether or not rate hikes would continue at their aggressive pace.  The slowdown in inflation exhibited by the month's CPI most likely solidified the Bank's adoption of a more dovish stance.

Philadelphia Federal Reserve Manufacturing Index (APR) (16:00 GMT; 12:00 EST)
Consensus:  14.0
Previous:  12.3

Outlook: Economists expect the Philadelphia Federal Reserve's April business survey to reflect faster growth in the manufacturing sector with a reading of 14.0.  Supporting the case for increased manufacturing activity was the previous month's performance of new orders and shipment indicators.  Of all the survey's sub-indices, the new orders and shipments indicators gained the most on the month in March.  This suggests that manufacturing activity in April is likely to have picked up pace in order to fill these orders.  As such, April's reading in the general activity index may give the headline index a boost.  With manufacturing activity continuously picking up pace, companies may eventually have to start charging higher prices for their goods as capacity utilization nears its peak.  In such a case, the U.S. Federal Reserve will have less reason to back off of their hawkish tightening policy. 

Previous: The Philadelphia Federal Reserve's business outlook survey revealed further expansion of the manufacturing industry in March as the survey's index issued a reading of 12.3.  Sub-indices for general activity, new orders, shipments, and employment all remained positive. In spite of gains in energy prices in March, only 23% of businesses surveyed reported higher input prices on the month.  This was far less than input price increases in both February and January, which were accelerated by January's massive surge in crude oil costs.  Although the percentage of firms reporting increased employment in March was lower than February's, the addition of manufacturing jobs was evidence of expansion in the sector.  As long as factories continue to rev up production to meet high levels of demand for manufactured products, employment conditions will continue to tighten. 

Richard Lee is a Currency Strategist at FXCM.