Reserve Bank of Australia Rate Decision (23:30 GMT; 19:30 EST)
Consensus:        6.00%
Previous:           5.75%

Outlook: The Reserve Bank of Australia is widely expected to raise its overnight cash target rate to 6.00 percent in attempt to cool inflation in the Asia-Pacific region's fifth-largest economy.  Despite May's increase to a five-year high, the Aussie benchmark rate has been incapable of curbing inflation, partially due to booming Chinese demand.  Australia's annual inflation rate hit 4 percent in the second quarter, a government report revealed last week, violating the RBA's target band for the first time in three years.  Aside from soaring gasoline prices, which nearly all countries are having to deal with, a key contributor to Aussie inflation was fruit.   Prices of the foodstuffs have remained high since a March cyclone wiped out an estimated 80 percent of the nation's banana crop.  Companies have had an easy time in passing the higher costs onto a willing consumer, with unemployment at thirty-year lows.  Thus far, the housing market has also been tolerated the high interest rates, suggesting further tightening may be justified.  While tomorrow's rate hike seems largely baked in, further hikes would be a stretch for the immediate term.   Analysts and officials will take in any post-commentary and Friday's quarterly monetary report to determine if another hike could possibly be on the horizon.

Australian Retail Sales (JUN) (01:30 GMT; 21:30 EST)
                          (MoM)       (QoQ ex inflation)
Consensus:         0.5%                0.7%
Previous:           -0.3%                1.7%

Outlook: June's retail sales are expected to have risen by 0.5% on the prediction that spending championed by low unemployment and impending tax cuts was able to offset drains on disposable income like high gas and lending rates. Unemployment in Australia has maintained thirty-year lows of 4.9%, driving wage increases as companies compete for the diminishing pool of skilled workers. Furthermore, Australian consumers are expecting tax cuts, which would help, flush out consumers' accounts.  Spending may also be buoyed by the RBA's refusal to raise interest rates in June despite inflationary pressures. However, interest rates are now at their highest level since 2001, and the average price for consumer goods reached an annual rate of 2.9% - both factors that brought June's consumer confidence to an eight-month low. Yet despite this, and oil prices that remained consistently above $70 a barrel, Australian retail sales are expected to recover from May's decline.

Previous: Retail sales dropped in May as an RBA interest rate increase combined with gasoline costs to depress consumer spending. With inflation at 4% on the month, the central bank was forced to raise interest rates in the hopes of curtailing inflation, despite consumer confidence already seeming to yield to higher energy prices. Consumer confidence in May actually fell by 6% in response as customers felt the pressure on their budgets. With consumers feeling pessimistic, discretionary spending was the biggest loser, as shopper stayed away from controlled their spending on goods such as clothing purchases in order to cover necessary costs like lending and gas.

Swiss SVME Purchasing Managers' Index (JUL) (07:30 GMT; 03:30 EST)
Consensus:          63.7
Previous:             64.0

Outlook: This month's PMI is expected to fall from June's strong number, as high oil prices counteract strong economic indicators to drag on production. Despite a scarcity of data so far for the month of July, Switzerland seems likely to continue experiencing strong growth, with previous month's data and available current reads still pointing the economy on its path. The leading indicator for July rose to a six-year high of 2.61, indicating strong consumer confidence and probable persistence in retail demand that in itself will offer a domestic foundation for future demand. One possible hindrance for Swiss manufacturing could be a decline in demand for exports, as European consumer confidence in July remained in negative territory. However, with a possible SNB rate hike over a month away, most of the expected manufacturing decline will likely be attributable to July's record oil prices.

Previous: Swiss PMI rose last month to 64.0 for the first increase in three months. Most of the gains were attributed to stronger demand from abroad, as well as a healthy increase in consumption at home as unemployment levels dropped. Swiss manufacturing has benefited from a strong European economy and a historically weak franc, which helped boost exports by 13.2% on the month in June. This also pushed Swiss unemployment down to three year lows of 3.3% as manufacturers increased hiring to meet demand, helping spur domestic consumption. In fact, the UBS measured consumption indicator reached a 5-year high last month, with many forecasting continued strength in the retail sector. Although the SVME may slacken slightly this month, don't expect a death knell for Swiss growth any time soon.

Euro-Zone Producer Price Index (JUN) (09:00 GMT; 05:00 EST)
                           (MoM)     (YoY)
Consensus:         0.2%        5.7%
Previous:            0.3%        6.0%

Outlook: Prices received by producers in the twelve countries that share the Euro are expected to slightly taper off of five-year highs as a break in input costs allowed them to cut prices and encourage spending.  Over the month of June, factory activity grew to a six-year high as revenues earned on exports were spent on boosting capacity through investment and hiring.  Already, firms' commitment to reinvest in the domestic economies is showing a positive effect through boosting the consumer.  Recently, the an indicator showed unemployment in the region's economy fell to a record low 7.8% in June.   This matches what earlier reads of retail consumer confidence and retail PMI revealed for the same month.  While the retail activity gauge contracted slightly from its highest recorded value since measurements began, shopper sentiment continued to improve to multi-year highs as a solid foundation of domestic growth forms.  Also for the month, the measure of inflation in the consumer basket - separating form the PPI by spreads placed on prices for goods at the intermediate level - grew to its highest level since October.  With all of these figures in place and consumers still willing to take on the additional burden, European producers may continue to find it possible to leak higher costs from the stubbornly high input costs onto its customers.

Previous: Producer Prices in the Euro-Zone accelerated to the fastest pace in over five years in May, leading many to believe that the European Central Bank would quicken its series on interest rate hikes.  According to Eurostat, goods from plastic to newsprint were 6 percent more expensive than they were a year prior.  May's increase in the PPI made for its third straight gain, and the number has held about 5 percent for all of 2006.  Robust growth in the region has been allowing producers to pass on soaring commodity costs, as they amount inflationary pressures from both sides.  With crude oil hitting records in late April, it is no wonder that producer prices reached such heights.  This leaves a rate hike at the August meeting a much likelier proposition.

Richard Lee is a Currency Strategist at FXCM.