Japanese Leading Indicators (MAY) (05:00 GMT, 01:00 EST)
Consensus:  75.0
Previous: 54.5

Outlook: The Japanese leading indicator reading for May is expected to rise strongly to 75.0 after April's modest rise to 54.5.  The number is still off the year's high of 83.3 for February, but if prints inline with predictions, would continue to support stable economic growth into the future.  The reading, which is an index of 12 economic indicators rated on a positive or negative basis, has been above the expansion/contraction reading of 50 since mid-2005.  Some of the component releases have already released their respective numbers and therefore their contribution to the overall indicator.  For the Leading gauge, job offers likely found a boost on the unemployment rate notching down to 4.0%, while commodity prices and global demand for Japanese goods soared.  On the other hand, some of the other components were well off from previous numbers.  The Topix began its precipitous decline in May and housing starts cooled from their rapid 1.335 million unit annual pace to a much more reserved 1.294 million.  The outcome of this indicator is still up in the air, with many of the pieces still unaccounted for; but the Bank of Japan is likely to take note of its outcome when its meeting roles around later this month.

Previous:  April Japanese leading indicator reading posted an initial reading of 50, that straddled the neutral line and repeated the previous month's figure.  However, the reading was later revised up to 54.5 with finalized economic data for the month.  Indicators were sparse in their negative bias, but they made their impact.  A major drop in the Topix took specific attention as initial inflation fears and other concerns drove the index down.  In addition, businesses were reporting little in the way of positive expectations.  Producers' demand and inventory ratios both worsened for the month while small business sales forecasts sank with a temporary dip in the employment boom seen recently.

Euro-Zone Retail PMI (JUN) (8:00 GMT, 4:00 EST)
Consensus:  56.6
Previous: 56.3

Outlook: Euro-zone retail PMI is expected to post a modest increase, pushing it further into the expansionary zone.  Already, surveys of the services and manufacturing have printed figures far better than anticipated.  Both sectors' read rose to six-year highs. Recent economic data leading into this PMI has been mixed, with consumer confidence posting a -9 reading, but other confidence surveys posted gains heading into the end of the World Cup.   Consumer inflation has facilitated spending habits by increasing 0.3% month over month in May, below a 0.7% expected pace, while a modest decline in unemployment puts more cash in consumers wallets.  While the ECB's meeting tomorrow is expected to pace without an additional tightening, if the retail PMI can line up with that of the services and manufacturing, the language for the September meeting could be that more hawkish.

Previous:  Euro-zone Retail PMI showed activity in the sector accelerated to its fastest clip in over two years, rising to 56.3 from 54.6 the month before.  This was yet another indictor that bodes well for European economies as the read holds north of the 50-expansionary level.  For the twelve countries reporting for the indicator, consumer personal spending accounts for over half of GDP.  The macroeconomic boost was provided by spending habits leading up to the World Cup, which meant special interest in electronics and soccer-related merchandise.

UK Manufacturing Production (MoM) (MAY) (8:30 GMT, 4:30 EST)
Consensus:   0.3%
Previous:  -0.2%

Outlook: British manufacturing, which has seen a marked recovery in recent months, is expected shrug off the previous months contraction with a 0.3% increase in May.  With energy and commodity prices relatively high, but stabilizing, producers are expected to continue their gradual pace of passing the costs onto more optimistic consumers and intermediaries.  Also providing positive bias is CIPS manufacturing PMI, which jumped to 55.1 from 53.3, the highest level since July of 2004, for the same month.  Conversely, the CBI Industrial Trends survey reported at a level -12.  April's -0.2% slowdown in manufacturing and -0.6% slippage in industrial production were both unexpected and seen on the most part as bumps in the upward trend, rather than an end to the recent improvement.

Previous: April saw a -0.2% slowdown in factory activity after sustained growth for several periods, despite analyst expectations of a 0.3% increase in output.  The decline sparked some question among traders whether the manufacturing recovery was reaching an end, but strong survey data points to future growth expectations in both producer and economist circles.  On a broader scale, the annual rate of manufacturing production slowed to 0.5%.  Because manufacturing accounts for approximately one-sixth of UK GDP traders will have to keep a cautious eye on the sector.

German Factory Orders (MoM) (MAY) (10:00 GMT, 06:00 EST)
Consensus:  0.0%
Previous:  4.1%

Outlook:  German factory orders are forecasted to remain level after the see-saw action seen over the past few months.  For the region, industrial orders for the zone declined -0.2%, but the German IFO survey reported a stronger than expected figure, suggesting the groups woes were not particularly the result of a German contribution.  Similarly, the PMI manufacturing survey for Germany beat expectations in May, reporting at 59.5 against 59.0 expected and 58.5 period prior.  The numbers indicate sustainable levels but provide little clear direction for the industrial trend in Europe's largest economy.

Previous: German factory orders pushed ahead to a 4.1% increase in pace over April as strong IFO numbers and a strengthening euro created a strong picture for Europe's largest economy.  This month's reading was a sharp correction from March's sudden drop.  The indicator has historically been fairly volatile, with major shifts not uncommon.  With this in mind, April's swing offered the first eight percentage point swing since Nov-Dec 2004, when the reading flew upwards from -1.8% to 7.1%.  Orders should stabilize after the major shifts have settled.

Bank of England Rate Decision (11:00 GMT; 07:00 EST)
Consensus:  4.50%
Previous:  4.50%

Outlook:  Analysts do not expect a change in Britain's overnight lending rate, which have held constant at 4.50% for the past ten months.  Bank of England Governor King noted that little has changed since May.  Further evidence for stability lies with the death of the board member Walton, the lone hawk in last month's 7-1 decision to keep rates level.  However, there has been some economic uncertainty of late with unexpected drops in Manufacturing and broader Industry, along with higher-than-anticipated CPI reports.  The annual CPI rate is now at 2.2%, above the target rate; but not far off step like the rates seen in the US.  Economic growth continues to increase, however, posting a 0.7% number quarter over quarter, beating expectations and the previous period.

ECB Rate Decision (11:45 GMT; 07:45 EST)
Consensus:  2.75%
Previous:  2.75%

Outlook: Despite global tightening the ECB is expected to keep rates at 2.75% after last month's 25bp hike.  However, expectations in the market are already increasing for a September boost.  This pass would keep the central bank's trend of quarter point hikes every three months since December well intact.  Economic data has been indecisively mixed, with conflicting indicators providing little direction.  Germany's ZEW survey reported a surprising drop in investor sentiment in June from 50.0 to 37.8, the second consecutive major decline; while the Zone's ZEW fell from 47.7 to 37.3.  Although consumer confidence remains low, confidence in production and services sectors is high. The PMI survey for activity in both factories and services rose to a six-month high.  Although analysts expect future hikes, there is little impetus for a move this month.

US ISM Non-Manufacturing Survey (JUN) (14:00 GMT; 10:00 EST)
Consensus:  59.0
Previous:  61.0

Outlook:  The US services sector is expected to remain expansionary this past month post but the solid figure is forecasted to slightly decline from the previous month.  CPI for May was slightly higher than anticipated at 0.3% and rising interest rates sparked by the inflationary concerns of the US Central Bank continue to hit the service sector.  US Leading Indicators were also down -0.6% in May, slightly below forecasts.  The University of Michigan Confidence Survey for June, however, reported above expectations at 84.9 and indicates that expectations remain positive.  Services are the largest single component of US GDP.

Previous: The service economy continues to show expansionary trend, but off of a yearly high the previous month.  The ISM non-manufacturing index dipped to 60.1 from 63 in April.  The indicator is above the neutral 50 reading, and therefore supports growth.  Contributing to the slowdown was sustained higher energy prices, which have begun to threaten growth in the world's largest economy.

Canadian Ivey Purchasing Managers' Index (JUN) (14:00 GMT; 10:00 EST)
Consensus:  65.0
Previous:  75.0

Outlook:  The Ivey purchasing managers survey, which measures business and government spending, is expected to come off last month's surprise all-time high.  The reading is expected to be partially corrective rather than indicative of a new downtrend.  The Canadian economy has shown strong, sustained growth recently and resultant spending from businesses who have received a glut of revenue from their exports are beginning to turn that money further into an economy that is seeing consumer and foreign dollars easing up.  Furthermore, high energy and commodity prices remain a boon for the overall economy but in turn gouge firms' profit margins and tighten consumer budgets.

Previous: The Canadian Ivey survey hit an all-time high in May at 75.0, up from a 55.7 reading in April.  The increase was also the largest single month over month increase.  This jump undid the modest drop posted the period prior, and confirms the strong uptrend in the Canadian economy.  It forecasts future strong growth.

Richard Lee is a Currency Strategist at FXCM.