1. US Gross Domestic Product
2. Tokyo Consumer Price Index
3. UK Gross Domestic Product

US Gross Domestic Product (1QP)(12:30GMT, 8:30EST)
Consensus: 5.8%
Previous: 4.8%

Outlook: Consensus for tomorrowââ,¬â"¢s GDP release is indicating that the economy of the United States during the first quarter actually grew at a faster pace than originally estimated in last monthââ,¬â"¢s release.  With economists placing annualized first quarter growth at 5.8 percent, the US economy looked to have begun the second quarter with more momentum than had been thought which may now place added pressure on the Fed to continue to tighten monetary policy.  The higher estimate is led by strong spending in construction as well as higher than predicted inventory accumulation especially during the month of March.  Although the recovery of the US economy is looking strongly positive for the first half of 2006, economists are warning that it may not be a smooth ride as factors are in place for a second half slowdown.  Consumer budgets are beginning to be stretched again and there is the possibility of a slowing in residential construction as the rising of Fed rates cools the housing market.  Business spending and investment do look to remain strong though the rest of this year however.

Previous: In Aprilââ,¬â"¢s release for the first quarter of 2006, the GDP of the United States showed a surge in annualized growth of 4.8 percent - the fastest rate of growth in 2 years.  This favorable release, falling only 0.01 short of expectations, signaled a return to the strong growth of the US economy as compared to the previous fourth quarter release of only 1.7 percent growth fueled by weak consumer and capital spending.  Reversing this period of slow growth in the first quarter of the year, consumer spending especially on durable goods recovered, led by strong comeback in automobile sales, along with the highest level of business investment in 6 years.

Tokyo Consumer Price Index (MoM)(May)(23:30GMT, 19:30EST)
Consensus: 0.3%
Previous: 0.3%

Outlook: Tokyo CPI, the leading indicator for gauging inflation in the Japanese economy, looks to have grown at 0.3 percent from May 2005, the same rate as the previous month.  As oil prices continued to rise, inflation has been given an extra boost in the country but it seems that the core prices have continued to grow as well.  The Bank of Japan, confident of the continued healthy price growth, is expected to begin raising rates away from zero percent as soon as September. Subsequently, it is predicted that there could be two to three hikes before the end of 2006, however the current weakening of the equities market in Japan is putting some question on how far the Bank will decide to go.

Previous: The Tokyo CPI release in April showed a climb from the 0.2 percent release in February and March to a 0.3 percent rise from April of 2005 continuing the slow climb away from the deflationary pressure seen in the country for so long.  The continued ascent calmed some worries that the country could return to deflation and further emboldened the Bank of Japan in its plans to tighten monetary policy and possibly raise interest rates away from the long standing zero percent. The April release was the fourth consecutive year-to-year rise and was higher than expectations that anticipated the index to keep the same growth of 0.2 percent as the previous months.  As rising petroleum prices do continue to boost inflationary pressure in Tokyo, the Bank of Japan does not want to act to soon with a rise in rates in order to avoid destabilizing the economy however the growth in inflationary pressures do appear to be strong and continuing.

UK Gross Domestic Product (QoQ)(1QP) (8:30GMT, 4:30EST)
Consensus: 2.2%
Previous: 1.8%

Outlook: As the British economy seems to be gaining momentum, first quarter growth rate predictions have been revised up to 0.6 percent giving and annual rate of 2.2 percent from 2005 over the 1.8 percent growth rate seen last year.  The economy enjoyed a strong start to 2006 with surprisingly high growth in the manufacturing sector, which benefited greatly from higher oil and gas output.  The sector has grown 0.5 percent over the last three months after a drop of 1.1 percent in the fourth quarter of 2005.  This puts manufacturing near the same growth as the service sector, which has traditionally been the driving force behind the growth of the British economy and has actually seen slower growth during this first quarter than during the end of 2005. The current trend of growth falls into the expected and comfortable range of the Bank of England indicating that, although lower interest rates may be coming later in the year, the Bank has no reason to move in either direction in the very near future.  The rise above the 2 percent level of growth has calmed many jitters and seems to indicate that the worst is over, but there are still significant worries that the economy will not sustain this recovery, as, despite the rise in certain sectors, spending has seemed to wane slightly.

Previous: In 2005 the British economy grew below 2 percent for four quarters in a row, hitting 1.8 percent annual growth in GDP in the final quarter.  Growth in manufacturing was disastrously low throughout 2005 pulling down the strength of the economy as consumers remained reluctant to spend in the economy.  Although the driving force of the economy, the service sector, did continue to grow, it was only at a surprisingly slow pace being pulled down significantly by the distribution, hotels and catering sub-sector which failed to grow at all during the final months of the year. 

Richard Lee is a Currency Strategist at FXCM.