Australain AiG Manufacturing Index (JUL) (23:30 GMT; 19:30 EST)
Consensus:        n/a
Previous:            54.5

Outlook: Many of the factors that helped boost Australian manufacturing last month are no longer present, with the result that a falloff from last month's year-long high may be expected. Although the labor market remains tight, consumption may suffer as inflation last quarter reached 4% on the year and oil prices reached new record highs. A potential RBA rate hike this month could deliver another blow as increased fuel prices combine with higher borrowing costs to hobble the industrial sector. With manufacturing numbers always sensitive to interest rates and with many predicting that the rate increase could take a significant toll on the Australian economy, look for the AiG survey to issue guidance to policy officials in their upcoming rate decision.

Previous: Last month, the AiG index rose to a twelve-month high as consumer demand provided a pull-through effect on production activity. Demand was propelled by thirty-year low unemployment and the expectation of tax cuts by the Australian government, which helped move inventory off of retailers' shelves by a projected 0.5% in June.  This, combined with early production of new auto models, caused an increase in new factory orders that doubtlessly contributed to last month's strong production. An additional benefit came from the RBA's decision to hold off yet again on a rate hike in June, which helped the industrial sector rise above the specter of increased oil costs.

UK Nationwide Housing Prices (JUL) (06:00 GMT; 02:00 EST)
                      (MoM)         (YoY)
Consensus:       0.4%          5.4%
Previous:          0.3%          5.0%

Outlook: British Nationwide House Prices are expected to extend gains and hit an annual pace of 5.4 percent, which would be its highest since May of 2005.  Anything less would be a surprise given the RICS measure have been steady ahead for a year now and Rightmove House Prices showed further gains when it was released two weeks ago.  Data is increasingly supporting a housing revival in the U.K., which in itself has contributed to other consumer gauges as it provides British a stronger asset base.  Already proving its potential, retail sales rose at a 3.7 percent annual pace in June while only a 2.9 percent gain was expected.  Additionally, price growth from growing housing values and subsequent consumer spending has stoked expectations of a rate hike from the BoE.  The CPI hit 2.5 percent year on year as opposed to expectations of 2.3 percent in its most recent release.  As the BoE is expected to raise rates before year-end, they will have to take into account this recovery, and whether or not they should allow it to go further and boost consumer spending.

Previous: House prices in the U.K. rose for the fourth consecutive month in June, adding to signs that the nation's $6 trillion housing market is climbing out of its slump.  The Nationwide Building Society further stated that progress would continue throughout the second half.  On a monthly basis, the average cost for a home rose 0.3 percent to Ã,£165,730 with the annual pace climbing to 5 percent.  Several surveys have consistently shown growth in the housing market since last August, when the Bank of England cut rates down to 4.5 percent.  The RICS survey, one example of the aforementioned real estate growth, should have made it clear that prices would actually rise.  The RICS figure surveys real estate agents on whether they think prices will rise or fall, and the result was the highest net positive level since 2004.  Signs of housing strength have been a pillar to the BoE's interest rate outlook, which have helped drive the pound over 500 pips higher in the past two weeks.

UK PMI Manufacturing Survey (JUL) (08:30 GMT; 04:30 EST)
Consensus:        54.5
Previous:           55.1
 
Outlook: British manufacturing activity is expected to drop in July on high oil prices and slackening consumer demand. Unemployment is rising in the UK and the World Cup effect is a thing of the past, both factors that are likely to slow retail sales and help depress industrial production. Also a matter of concern for British industry are oil prices that reached a high in mid-July, which could squeeze consumers' budgets and force price increases on manufactured goods. The Bank of England has so far maintained an accommodative monetary policy, but that alone will not be enough to help manufacturing continue at last month's unusually fast pace. With the end of the World Cup, record oil prices, and the strong possibility of a BoE rate hike in the near future, manufacturing could once again find itself detracting from economic growth.

Previous:  Output rose last June by its fastest rate in two years, lifting the British manufacturing PMI to its highest level since 2004. This finding indicates that the industrial sector may continue to grow, after official numbers showed 0.5% production growth in May, with electrical equipment production leading the way. Consumer demand proved key for industry, as the UK saw a three-month high in retail sales on purchases of televisions for the World Cup. Auto production also increased by 0.4% on the month, as oil prices eased slightly from their extraordinarily high levels in April and May. Despite this strong showing, however, manufacturing numbers are expected to ease from last month's impressive data.

US Core Personal Consumption Expenditure (JUN) (12:30 GMT; 08:30 EST)
                        (MoM)        (YoY)
Consensus:       0.2%         2.3%
Previous:          0.2%         2.1%

Outlook: The United States is expected to see inflation at a 2.3% annual rate in June's annual PCE read, despite the Federal Reserve's attempts to control the price level. Oil prices are, of course, a major contributor to this inflationary cycle, and have continued to stymie the Fed. Although core PCE excludes energy prices in its calculation, oil has ranged well above $70 a barrel since April, and the higher costs are slowly finding its way in consumer goods as second round effects. In fact, look for increased production costs to be a significant determinant of the overall price level, as PPI reached 4.5% in May. The predicted 2.3% annual increase in the core PCE is consistent with June's core CPI numbers, which came in at 2.6%, and with the quarterly core personal consumption number, which came in last week at 2.9%. With the Fed paying close attention to all prominent inflation measures to help decide on future rate hikes, this indicator is likely to garner significant attention from the currency market.

Previous: May's PCE came in at 2.1%, unchanged from the month before, which spurred speculation that inflationary pressures may be easing. With oil actually falling from its then-record prices in April, and retail sales beginning to slow, predictions multiplied in support of the Federal Reserve pausing its tightening of monetary policy. However, although inflation appeared to stall temporarily, the PCE numbers were still at a year-long high and didn't seem to show any signs of a significant slowdown. In addition, producer prices rose faster than expected in May, and with that number came the expectation of future price increases for consumers. Finally, however, the Fed's promised vigilance in preventing inflation won out over concerns of an economic slowdown as June saw the members vote for a 17th straight rate hike.

US ISM Manufacturing (JUL) (14:00 GMT; 10:00 EST)
Consensus:      53.5
Previous:         53.8

Outlook: The ISM Manufacturing Index is expected to fall again this month to 53.5, its second straight decline from April's 2006 high.  Although indicative of slower activity than the previous month, the number is not overly detrimental because a reading above 50 signifies expansion in the manufacturing sector, which makes up about 13 percent of the economy.  The index has been above 50 since May of 2003.  A key component to look out for in tomorrow's measure is the unemployment gauge, which serves as a leading indicator to non-farm payrolls, as the moderating number will be critical to the Fed's decision next week.  With initial signs of consumers reining in spending, factories are finding their basis for demand from business investment in technology and equipment to improve efficiency in the face of higher costs. This was evidenced by last week's healthy jump in durable goods orders.  Also exemplifying strong demand was June's capacity utilization, which came in at 82.4 percent for a six-year high.  Business expansion cannot be sustained forever though, especially with the consumer finding less disposable income to put back into the economy.  Already on a doubtful path, on Friday the market witnessed US GDP come in at a disappointing 2.5 percent annual pace, held down by a pullback in consumer spending.  After seventeen consecutive increases since 2004, there is now growing speculation that a pause could be in store.  Despite the fact that inflation is not yet conquered, the Fed may need to be a bit more accommodation in order to avoid a downward spiral in manufacturing as cutting jobs will further hurt demand for their goods in the long run.

Previous: U.S manufacturing growth unexpectedly slowed for the second straight time in June, falling to 53.8 from 54.4 in May.  Companies slowed expansion in the face of higher energy costs and poorer consumers.  The details of the survey provided that for one, manufacturers are trimming stockpiles, which indicates that they are having a harder time selling their goods.  The gauge for employment also fell to 48.7, lowest level since October of 2003, perhaps reflecting May's annual low non-farm payrolls added.  This slowdown in growth is reflecting that which the US faces in months ahead, as manufacturers cut back to stay in line with demand.  The inventory component of the index fell to 46.9 from 48.  On the bright side, prices paid fell and new orders rose from May's low, but production fell to 55.1 from 57.2.

Richard Lee is a Currency Strategist at FXCM.