German Factory Orders (JUN) (10:00 GMT; 06:00 EST)
                          (MoM)          (YoY)
Consensus:          1.3%            9.1%
Previous: -            1.2%          17.3%

Outlook: Factory orders in the world's third-largest economy are expected to rebound from last months decline, but slow to a 9.1 percent annual rate of growth as higher lending rates slow activity.  A series of interest rate hikes, four in the past eight months and perhaps more to come, have been boosting the European currency and thus hurting foreign sales of German-made goods, as seen in May's decline in exports.  Although it would mark a significant slowdown from May's multi-year high on the shorter time frame, a 9.1 percent annual pace is still strong compared to recent years.  The European Central Bank raised its benchmark rate to 3.00 percent this morning and indicated the potential for more hikes to come, reflecting predictions of sustained inflation and growth to drive it.  Much of pull needed for factory orders may need to come from the German and other Europeans as signs that the US consumer has trouble purchasing costlier trans-Atlantic goods puts exports in question.  However, if the European consumer proves unreceptive, not only could factory orders slow, but the ECB's watch on growth could yield a different picture.

Previous: German factory orders fell by 1.2 percent in the month of May from a 4 percent jump in April as a stronger Euro made German goods less competitive in foreign markets.  On the longer, annual term though the gauge accelerated 17.3 percent as factories in Europe's largest economy have been enjoying a wave of economic strength throughout the region.  An improving labor market has also been helping the region shrug off higher oil prices and an 8 percent gain on the dollar this year, which has helped sustain the downstream pull-through for goods from the consumer.  Foreign orders dropped 4.2 percent on the month and domestic consumer demand jumped by 1.6 percent.  The concerning element of the gauge was plant and machinery, which declined by 2.6 percent, possibly indicating that companies are weary about the future as the ECB continues to raise interest rates yet the global outlook for growth appears unpromising.

Canadian Net Change In Unemployment (JUL) (11:00 GMT; 07:00 EST)
Consensus:            25,000
Previous:               -4,600

Outlook: The Canadian economy is forecast to have added 25,000 jobs in July, a rebound from June's first net loss of the year.  In turn, the unemployment rate is expected to hold at its 32-year low, 6.1 percent for the third straight month.  Since the Bank of Canada announced that no additional increases were need on the 11th of July, its currency's price has relaxed.  This should be particularly beneficial to companies wanting to invest in skilled employees to broaden capacity restraints that have made it hard to meet demand from both domestic and foreign consumers.  At home, Canadians have used the high level of employment and steadily rising wages by purchasing more goods from domestic producers.  Another factor lending itself to encourage hiring at firms were commodity prices.  While producers of necessary goods continued to benefit from relatively high prices, which are increasingly finding their way into investments; a gradual easing of many of the raw materials have eased other sectors' bills.  As has been proven true so far though, extra oil-cash should give companies immunity from the highest interest rates since 2001, and allow them to hire more workers.

Previous: Against predictions for a June's payroll additions to tally the year-low, 10,000 new Canadian jobs, employers surprised the market by unexpectedly shedding a net 4,600 workers.  On the other hand, the labor force contracted to 17.6 million, down 10,700 participants, allowing the unemployment rate to hold at its 6.1 percent lows.  Layoffs were led by construction and trade industries as builders fired 19,200 and 16,700 workers respectively.  Signs of economic weakness such as a weaker labor market have prompted the Bank of Canada to pause in its tightening cycle, as the trade and construction industries are ailing from higher borrowing costs and a stronger Canadian dollar.  In fact, Canada's trade surplus unexpectedly shrank in April to the smallest level in two and half years as auto exports became less competitive overseas.  The Canadian dollar peaked on May 31st, which especially hurt June's exporting industry, but has since relaxed as the market believes that the BoC is done with raising rates.

US Net Change In Non-Farm Payrolls (JUL) (12:30 GMT; 08:30 EST)
Consensus:           145,000
Previous:              121,000

Outlook: Employers in the United States are expected to expand hiring for the second straight month after May's upset of 92,000 jobs added.  This number may support the belief that a slowing labor market is still enough to sustain economic growth at higher borrowing costs.  This month's jobless claims have shown that employers are still healthy enough to hold onto their workers as the amount of people who filed for benefits averaged 312,330 during the first three weeks of July and 307,600 in June.  On a different note, wage growth is also expected to moderate to 0.3 percent from last month's surprise jump, making it cheaper.  Economists also note that companies do not need to add as many jobs because fewer people are entering the work force.  Before his testimony to the Senate on July 19th, Bernanke stated that payroll growth of "more like 130,000 and possibly lower" will be sufficient for a stable economy.  Another change for payroll predictions from the previous month's release run up has been the shirking of other employment gauges.  The manufacturing and service ISM employment components were largely overlooked, as was the surprising contraction in private company hires to 99,000 employees added. Many analysts and officials believe the non-farm payroll data could be the deciding factor in next week's FOMC meeting where expectations for an eighteenth consecutive hike are split.  Should payrolls disappoint, it could forecast slower consumer spending trends to come, and in turn cooler inflation that does not require further policy constraint.

Previous: The world's largest economy added 121,000 payrolls in June, up from May but short of an expected 175,000.  Hourly earnings rose 3.9 percent on an annual basis and the unemployment rate held near five-year lows at 4.6 percent.  The report sent the dollar down, adding to speculation that the Fed would need to end its series of raising rates in order to prevent an economic downturn.   Adding to inflationary pressures were hourly earnings, which rose 0.5 percent on the month when expected to rise by only 0.3 percent.  The Fed is now between a rock and a hard place, with oil-induced inflation on one side and ailing economic expansion on the other.  It is becoming more and more clear that the economy cannot handle further restriction from the Fed, so they will have to become more accommodative sooner, rather than later.

Canadian Ivey Purchasing Managers Index (JUL) (14:00 GMT; 10:00 EST)
Consensus:       53.0
Previous:          62.2

Outlook: The Ivey Business School's poll of Canadian business and government purchasing managers is expected to slow for the second month in July as tight labor markets, high commodity prices and dear lending rates put pressure on firms.  A generally accepted indicator of business health through purchasing activity, the index is expected to have declined to 53.0 in July from the prior month's 62.2 print.  Perhaps the biggest break on spending in the sector resided with supply-side costs like raw materials and labor.  In July, crude oil prices, the barometer for production capability, spiked to an all-time high $78.40 per barrel.  Employment has also become a costly input as the price for skilled labor has risen with the contraction in the jobless rate.  June's unemployment rate stayed at a 32-year 6.1%, and it is expected to stay there in July.  Another problem for purchasing managers are high lending rates, which have made financing for big-ticket items or factory improvements an expensive venture.  On the other hand, the Bank of Canada's decision to put off anymore rate hikes is likely resound through the business community should revenues keep to healthy levels.  Also, contradictory to the expected decline in the Ivey, a business conditions outlook indicator for the third quarter revealed manufacturers expect output to remain the same for the coming three months. 

Previous: Purchasing activity amongst Canadian managers slowed more quickly than expected in June from its record high just the month before.  On the back of May's record 75.0 read, the June calculation printed a much-reduced 62.2.  From the component reads of the overall gauge, the reasoning for this contraction became evident.  An increase in both prices and employment, helped to weigh down the bottom line.  On its own the employment gauge aligned itself to the improvements recorded by the government as its rose to 65.1, its highest read in recent history.  At the same time, the price component rose to its figure since the October after Hurricane Katrina quickly inflated prices.  Despite these shifts two improvements in the month were signals that inventories were being consumed and the time to fill orders was being reduced, suggesting demand was improving and capacity restraints were being answered with the increase in labor and investment.

Richard Lee is a Currency Strategist at FXCM.