UK RICS House Price Balance (JUN) (23:30 GMT; 19:30 EST)
Consensus:       20%
Previous:          20%

Outlook: The UK RICS House Price Balance is expected to show a second consecutive 20% increase for the month of June, sustaining the two-year high set in May.  The indicator is the measure of surveyors reporting higher home values against those reporting lower home values.  Ahead of the RICS release was the Rightmove House Prices release, which showed a 0.8% month over month increase in June and a 6.4% year over year increase.  Many analysts had forecast a slowing housing market in the second half of 2006 due to decreased demand and rapidly inflating prices, but the sector shows no signs of cooling off.  Boding well for the future was the 2.9% month over month increase the Rightmove indicator showed in July, and the astonishing 10.6% annual figure.  House prices are a good indicator of general economic conditions, as homes account for almost 60% of British wealth.  The numbers could also be a boon for pound bulls, as the increasing house prices tend to push up inflation, which may force the Bank of England into raising rates at a faster rate than previously expected.

Previous: The UK RICS House Price balance indicator rose for the third straight month in May, up to a 20% read against 14% expected and 15% the month prior.  The increase was the largest since May 2004 and was driven primarily by growth in Scotland and the area surrounding London.  The indicator has risen eight out of the past ten months since the BoE cut interest rates to 4.5% in August of 2005.  It has also turned around from the all-time low of negative 46% reported in May of 2005.

Japanese Tertiary Industry Index (MAY) (MoM) (23:30 GMT; 19:30 EST)
Consensus:     -0.3%
Previous:          1.3%

Outlook:  The Japanese tertiary industry index is expected to post a 0.3% decline for the month of May, resuming the downtrend broken in April.  The index is a measure of demand in non-manufacturing services, and is a strong indicator of consumer spending, which accounts for almost 60% of Japanese GDP.  The decline indicates a possible slowdown in the Japanese economy, which recently saw the annualized measure of GDP revised from an estimated 1.9% expansionary pace to a stronger 3.1%.  The slowdown comes despite a 15.3% surge in Machine Tool orders and the 13.9% growth in first quarter capital spending, which looks to have held through to the second quarter.  The all-time low jobless rate of 4.0% did not deter forecasters from predicting a drop in the indicator either.

Previous: The Japanese Tertiary Industry Index rose to 1.3% in April on increased business spending and improving employment conditions.  The index reading was up from -0.6% in April, and bettered the 1.0% that was expected. Driving the index up was a 5.9% increase in demand for computer systems, while wholesale trade was up by 5.2%, and architecture and engineering were up 3.7%.  Furthering boosting the numbers was the improving job situation, as the jobless-rate hit a seven-year low of 4.1% in April.  Machine orders improved 1.4% in April while first quarter capital spending was up 13.9%.

Swiss Adjusted Retail Sales (YoY) (MAY) (07:15 GMT; 03:15 EST)
Consensus:        n/a
Previous:           12.2%

Outlook: Swiss Adjusted Retail Sales are expected to continue their upward march in May, as most of the economic data points north.  The Swiss economy is expected to grow 2.5% in 2006, up from 1.9% in 2005.  Low unemployment has been both a result of the strong growth and a driving factor.  May unemployment hit a three-year low of 3.3% (having since been surpassed with a June rating of 3.1%).  Firms have increased employment as growing demand in neighboring Germany and rapidly expanding China have boosted worldwide consumption.  In addition, the increased employment fuels domestic demand, which accounts for approximately 60% of the $340 billion Swiss economy.

Previous: Adjusted retail sales out of Switzerland posted an all-time high of 12.2% in April, recovering from the 6.8% fall in March.  The number out-performed the expectation of a 7.0% increase along the way.  The increase was a result of adjustments from the three fewer shopping days in 2006 compared with April 2005.  Real sales had actually dropped 0.7%, the first drop since 2003.  In addition, the drop in March was similarly the result of calendar day differences and the late Easter rather than an economic slump.  Both adjusted and real retail sales have performed strongly of late, with increases ten out of the past eleven months.

Euro-Zone ZEW Survey (JUL) (09:00 GMT; 05:00 EST)
Consensus:         35.3
Previous:            37.3

Outlook: Another drop is forecast in the Euro-Zone ZEW survey of current economic sentiment, which would be the seventh straight drop in the reading since the yearly high of 66.1 in January.  Forecast predictions have been substantially above the actual readings since February as declining economic sentiment has struck European countries despite improving growth.  The survey is expected to decline on continually increasing oil prices, monetary tightening at home and abroad, and a general unease with regional war threatening in the nearby Middle East.  In Germany, the implementation of the Value Added Tax will push rates up to 19% from 16%, which is expected to also hurt spending.  Although the European economy has seen some positive economic data this does not appear to be enhancing general consumer sentiment.

Previous: The European region's ZEW survey tumbled again in June from 47.7 to 37.3, below expectations of 41.5.  Rising oil prices and a strengthening Euro have caused concerns about the future strength of the export industry and the broader economy.  Also hampering economic sentiment was the 2.5% expected inflation rate, well above the ECB target rate of 2.0%.  The number generates concerns about price growth and almost guarantees near-term rate hikes.  Some analysts are predicting two increases to 3.25% before the end of the year, while some are predicting additional rate hikes in early 2007.  Economists note that the delay between interest rate raises and economic output is generally three to nine months, which means current boosts will target future inflation concerns.

US Producer Price Index (YoY) (JUN) (12:30 GMT; 08:30 EST)
                     (Headline)     (Core)
Consensus:        4.6%        1.7%
Previous:            4.5%        1.5%

Outlook: US PPI is forecast to grow 0.3% in June, with Core PPI up 0.2%, primarily on increasing fuel costs.  Energy prices are set to rise 1.0%, driven by a 6% surge in gasoline prices.  Several factors have caused the skyrocketing energy prices, including the summer driving season, rising demand from developing nations, and especially turbulent conditions in the Middle East.  The nationwide average price at the pump recently topped $3.00, which was last seen following Hurricane Katrina and had been called a "tipping point" for consumer demand and prices in all sectors of the economy.  Although there have been some negative effects from the inflating numbers, the economy has so far not suffered the major downturns some had expected.  Nevertheless, sustained energy prices or continued increases could increase US factory gate prices, which in turn could set the tone for CPI increases and future Fed rate hikes.  Central banks around the globe have been tightening monetary policy, which could curb world growth and ease inflation concerns and price pressures.  However, a slowdown in the global economy coupled with skyrocketing oil prices could have severe consequences for inflation in both producer and consumer sectors.

Previous: May PPI in the United States increased more than expected, as energy prices rose substantially.  Energy prices increased 0.4% after a 4% rise in April, while gasoline jumped 2.2%.  Food prices eased 0.5% for the month, helping to curb the inflationary measure.  The indicator has been rising recently, with a 0.9% increase in April and a 0.5% jump in March.  As noted above, the indicator could be a leading measure of inflation.  As producer prices continue to increase the costs could shift on to consumers and increase CPI and drive inflation up despite continued Fed increases.

US Net Foreign Securities Purchases (TICS) (MAY) (12:30 GMT; 08:30 EST)
Consensus:       $56.0B
Previous:          $46.7B

Outlook: After the currency markets failed to respond to the surprise in the United States goods and services trade deficit in May, the pressure seems to be riding with the TICS release for the same month.  Expectations of a rise in net foreign investment into the US to the tune of $56 billion would be a hearty improvement to the $46.7 billion printed in April, but would still fall far short of the task of funding the goods deficit.  With a $63.8 billion shortfall in the trade balance, an amount equal to or greater than that in the form of a surplus from the investment gauge would be needed to in effect 'fund' it.  As it stands, support for the growth in the TICS read is on shaky ground.  Investment in treasury paper could be the driver for the rise.  The Federal Reserve had raised the overnight lending rate on May 10th, which could have drawn more investors to the higher yields.  However, the previous hike was in March, and April's TIC data had produced little response to the higher yields over the following month in response.   Also, expectations that a flight to quality during a sell off in emerging markets sell-off could prove to be overblown.  Posing as the biggest possible detractor from the TICS read is equity investment.  Many investors, foreign and domestic, likely took heed of the quick decline in the US' major equity indices beginning in May and liquidated positions.  The benchmark S&P 500 notched a 6.3% decline for the month, which extended further into June.  Saddled with the task of funding a rising goods deficit, a disappointment compared to expectations could be doubly bearish for the US dollar.

Previous:  Net foreign investment in US assets took a surprising dip in April as international investors liquidated some of their positions as many deemed their exposure to US dollar exchange rates too great.  Against the market's consensus of a $60.0 billion increase in net investment, the TICS read had actually advanced only $46.7 billion.  Leading the decline was a massive decline in the pace of stock accumulation.  After investors gobbled up a net $19 billion worth of US equities in March, a slight $6.5 billion was all that could be mustered the following month.  Net purchases of corporate debt also reduced its pace to $33.3 billion from $48.4 billion the month before.  The only real increase came on the back of increased interest in treasury paper, although that tallied a relatively slight $3.3 billion.  Though the decrease in foreign interest in US assets was judged as a naturally disappointing turn of events, the real economic damage done was the shortfall in funding the other trade account deficits.  The goods deficit outpaced the investment figure for the month and the necessary $2.5 billion a day needed to fund a current account deficit of similar size to the one in 2005, was not even in the ball-park.

Richard Lee is a Currency Strategist at FXCM.