Australian AiG Performance of Services Index (JUL) (23:30 GMT; 19:30 EST)
Consensus:          n/a
Previous:             52.6

Outlook: July's services numbers will likely see the effects of record oil prices as the pass through to consumer prices continues to cast its influence. Inflation reached 3.5% on the year, prompting the Reserve Bank of Australia to increase the nation's overnight lending rate in May and once again just this week. With so many consumers feeling the pressure of higher prices and ever-rising borrowing costs, consumers may respond by regulating their spending habits. This would almost certainly detract from the service sector's activity, since it does account for the largest portion of the domestic economy.   One similar gauge, July's manufacturing figures, could act in leading its services counterpart after showing a sharp drop in its own measurements.  However, with the tight labor market driving wage increases, a recent indicator showing a surprising lift in retail sales and impending tax cuts fully capable of pushing the number to the upside, an improvement would not be far fetched.

Previous: Last month saw growth in Australian services as restaurants and hotels led a recovery in the industry from May's year-long lows. Providing the boost for the firms was a steady base of domestic demand for the month, with thirty-year lows in unemployment boosting spending despite gas prices that depressed consumer confidence to eight-month lows. With consumers apparently still willing to open their wallets, the hospitality and services industries grew by 0.3% according to official statistics. Little surprise, then, that services were up by 3.3 points from the month before, as the service industry expanded, anticipating further growth.

Swiss Consumer Price Index (JUL) (05:45 GMT; 01:45 EST)
                          (MoM)      (YoY)
Consensus:          -0.5%      1.6%
Previous:              0.0%      1.6%

Outlook: The Swiss Consumer Price Index is expected to hold at a 1.6% pace through the year to July, but dip on the month following a drop in retail sales.  Although Swiss inflation remains below the common European 2.0% comfort-zone, it has advanced for three straight months as oil prices infiltrate the average consumer product.  On that note, Producer and Import Prices advanced to 3.1% on the year, when only expected to rise to 2.9 from the previous 2.8%.  Producer and Import Prices serve as a key leading indicator to the CPI, especially in a low-unemployment environment like that of Switzerland where producers have an easier time passing on higher input costs.  Furthermore, the UBS Consumption Indicator came in at 2.111 in June, as it continues to extend multi-year highs.  With lending rates still low, another surprise jump in the CPI is not out of the realm of possibility and could make a strong case for another move by the Swiss National Bank this year.  A hike in September seems largely priced in as the European Central Bank is widely anticipated to make another move and the SNB is expected to draft its big sister economy to stay in touch with its regional associate. 

Previous: Inflation in Switzerland accelerated to 1.6% in June, the fastest pace in five years.  Following a 1.4% reading in May, the CPI was predicted to accelerated to a 1.5% pace, giving great support for the SNB to increase their benchmark rate in September.  As the central bank expects the economy to grow 2.5% for the best year since 2000, producers have found little trouble in passing energy costs onto consumers who share the optimism officials have for the economy and the sustainability of current hiring trends.  Other contributors to faster inflation were high producer and import prices, and a surprise jump in retail sales, which advanced 12.2% as opposed to expectations of 7.0%.

German Services PMI Survey (JUL) (07:55 GMT; 03:55 EST)
Consensus:      60.1
Previous:         61.0

Outlook: Germans' spending on services is expected to decline as oil prices rise and the buoyant effects of the World Cup become a thing of the past. Oil reached a new record of $78.40 a barrel, and extra production costs are likely to be accompanied by further second-round effects on German consumers, who may respond to the generous passing of higher costs into their products by constraining spending. Not only are many consumers expecting further gasoline and oil price woes, but also a planned increase in value added taxes for the coming year should also all weigh on shoppers optimism in the present.  Further while recent declines in unemployment are a positive signal for the demand side, the improvement may be taken as too little, too late to offset the plethora of other numbers. With July's ZEW economic sentiment index falling the most in nearly four years, and heated expectations of yet another ECB rate hike to increase consumer lending rates, demand for and supply of services could have been in a position to decline last month.

Previous: June saw a marked increase in spending, both on services and on retail items. With consumer confidence at a five-year high, the services PMI number beat the expected tally of 57.3 by a considerable margin. This figure is very much in line with the overall state of the European services industry, which grew at its fastest rate in six years. Although seemingly extraordinary, these numbers are as not surprising in context, considering the falling unemployment rate that continues to drive spending, and confidence underlying the World Cup loosing purse strings throughout Europe. However, with rising oil prices hitting the producer and gasoline affecting the consumer and so much of June's spending tied to the World Cup, many analysts predict a falloff in services purchases for the following month.

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

Outlook: In spite of a housing market revival and growing liquidity, the market consensus still holds out for the Bank of England to pass over a policy shift, leaving its overnight target lending rate at 4.50%.  On the 19th of July the BoE voted unanimously to keep interest rates steady, primarily because wage growth "remained subdued."  The labor market has been a key factor in the central bank's accommodative strategy, and this month's rising jobless claims and ILO unemployment rate are suggesting much of the same this time around.  Rising unemployment in the U.K. has shirked the potential for higher wages while on the other side commodity-induced inflation continued to erode their purchasing power.  British inflation in June bested expectations by rising to a 2.5% annual pace, matching the fastest pace of growth in consumer product prices since November of 1996.  Inflation and excess liquidity had provided a 40% chance of a rate hike going into this week, the level of confidence since 2003.  To support confidence for voting members, data is increasingly spelling out a property market revival in the world's third largest economy.  House prices according to the Nationwide Building Society are now rising at a 5.9% annual rate.  What is still noticeably absent however was strength in consumption.  Retail sales have been on the rise for four straight months and their annual pace remains strong, but much of this is being accredited to the temporary effects of the World Cup.  In the coming months, strength in spending will be critical, as it will also help float other sectors of the economy.  To avoid a domino effect in the other direction, however, the Bank of England will likely tread cautiously and make sure that it does not stall the real estate market before its strength solidifies.

European Central Bank Rate Decision (01:30 GMT; 21:30 EST)
Consensus:        3.00%
Previous:           2.75%

Outlook: The European Central Bank is overwhelmingly expected to raise the region's overnight lending rate 25 basis points to 3.00%, after declining to do so in last month's meeting.  Inflation is one of the Bank's foremost concerns, as consumers saw prices spiked 2.5% on a yearly basis, considerably faster than the ECB target level of 2%. Consumers are also likely to see further pull-through effects boosting their already elevated price level as crude oil prices reached record highs in July, and June's PPI rose by a greater than expected 5.8% in June. In addition, Europe's economy has proven especially robust lately, with Germany, the continent's largest economy, witnessing firm consumer spending with retail sales boosted 1.9% last month. With Euro-Zone first-quarter GDP growing at its fastest pace in two years, and estimates predicting even speedier growth in July, the ECB will most likely find a firming of monetary policy well within their scope.  Keeping this in mind, the real market moving potential of the announcement will lie with the commentary that will accompany the decision.  If a rate hike is received with a reversion to more neutral statement, expectations for a following hike could drop quickly.  This scenario would fulfill the recent pace of 25 basis point hikes ever quarter which has evolved since December.

Richard Lee is a Currency Strategist at FXCM.