Japanese Leading Economic Index (APR P) (05:00 GMT; 01:00 EST)
Consensus:   50.0%
Previous:   54.5%

Outlook: Expectations hold that the Japanese economy, although strengthening quickly, may have experienced a pause in April with the leading economic index expected to teeter on the 50 percent, expansionary defining level.  Many of the sub components that make up the index have seen negative turns for April.  Small business sentiment was lower as owners anticipated the central bankââ,¬â"¢s desire to eventually raise interest rates off of the long standing zero rate policy.  Interest rate expectations for the near term however remain low as the Bank of Japan has recently stated that it is in no hurry to raise rates.  Further driving the headline gauge down were consumer sentiment, spending and overall demand; which were heading lower along with machine orders and the general health of manufacturing.  In contrast, housing starts jumped during April and the economy as a whole seems to remaining lively with growth well within the economyââ,¬â"¢s capacity - which will help to negate out some of the downbeat data.

Previous: Japanââ,¬â"¢s leading economic index issued a 54.5 percent read for the month of March, falling from the extreme high number reached in February.  This decline did not cause too much anxiety though as the nature of the index is to be very volatile.  However this reading along with other tepid economic releases have given the Bank of Japan more justification to hold out in raising lending rates.  Policy makers were already hesitant about tightening monetary policy so as to not slow the economic growth of the country.  This indicator conveys the general sentiment between the central bank and the decision to finally raise lending rates.  While releases have not necessarily come in weak, they have not been strong enough to encourage the BoJ to make the much-anticipated move.

Euro-zone Retail Sales (MoM) (APR) (09:00 GMT; 05:00 EST)
Consensus:    1.1%
Previous:   -0.8%

Outlook: Euro-zone retail sales are expected to have risen 1.1 percent over the month of April.  Contributing to expectations of the rebound is the retail purchasing managerââ,¬â"¢s index for the same month, which recorded its highest level in 5 and a half years and in doing so defining a promising outlook for the entire sector.  Further, as domestic economic strength in the Euro-zone continues to improve, personal spending should naturally increase with it, and in turn pull up retail sales.  A strong reading in retail sales will be yet another indicator that reaffirms the now prevalent rumor that the European Central Bank will be able to increase the overnight lending rate a greater than usual 50 basis points, rather than the normal quarter point hike, without harming to the economy too much.

Previous: Retail sales in the Euro-zone declined 0.8 percent over March, a reading well below expectations for a solid, one percent rise.  Contributing to the counterintuitive decline was hurting consumer confidence over the same period, which in hindsight, means a drop in the retail sales gauge would not be particularly surprising.  Although the economic growth in the Euro-zone had picked up considerably in the beginning of 2006, the growth was being mostly driven by strong exports and increased investment activity rather than solid support from more reliable domestic demand.  Private spending continues to straggle behind while leaving the economy in a precarious position. 

Australian Unemployment Rate (MAY) (01:30 GMT; 21:30 EST)
Consensus:   5.1%
Previous:  5.1%

Outlook: Australian unemployment indicator is expected to remain steady through May at 5.1 percent on the back of the rise the month prior.  Job advertisements for the same period rose to a six-month high while mining companies were actively hiring.  This expected recovery in some areas of the job market during May however does not lead economists to increase their expectations for the jobless rate.  Companies are still worrying about the cost raw materials like that of energy and industrial metals while the lack of available talent is boosting wage requirements.  The Reserve Bank of Australia is expected to keep its interest rates steady however after surprisingly raising interest rates to 5.75 percent at its last meeting.  This has eased worries over more expensive borrowing costs in the near future and may have calmed employersââ,¬â"¢ jitters enough to keep them from continuing to fire workers.

Previous: The unemployment rate jumped to 5.1 percent, from the 29-year low of 5 percent, during April.  The decline in employment came as employers fired workers to cut costs as companies were burdened with record gas prices, rising wages, and higher interest rates.  Conversely, a measure of full-time employment actually showed a slight rise during the month; but companies fired a large number of part-time employees especially in the hotel and restaurant industries.  This weak employment release sparked speculation that the Australian economy was not really as strong as originally thought and that another rate hike soon would be unlikely and unnecessary. 

Reserve Bank of New Zealand Official Cash Rate Decision (21:00 GMT; 17:00 EST)
Outlook: 7.25%
Previous: 7.25%

Outlook: Offering the highest interest rate among industrialized nations, the New Zealand economy looks relatively unstable to warrant another rate increase above the current 7.25 percent.  Although unemployment remains at record levels of 3.9 percent and fuels wage increases and labor costs, it remains highly unlikely that Reserve Bank of New Zealand Governor Alan Bollard will decide to keep rates at the current level even as the current rate of price increases rivals the upper band of the central bank target.  The central bank is widely focused on keeping price increases between the 1 and 3 percent target benchmarks.  Subsequently, expected to rise by a 3.6 percent clip, inflationary pressures are looking to mediate at the beginning of next year and slow to a 2 percent pace, a notion that is contributing heavily to the overall decision   What will be notably focused on is the following revision lower in gross domestic product, expected to follow the decision.  Any revision or suggestion higher may spark renewed interest in the Kiwi denomination in the near term.

Richard Lee is a Currency Strategist at FXCM.