New Zealand Producer Prices (QoQ) (2Q) (22:45 GMT; 18:45 EST)
                            (Input)           (Output)
Consensus:           1.8%                1.4%
Previous:               0.9%                0.7%

Outlook: Producer prices are expected to have increase twice as quickly in the second quarter as they had in the first three months as raw materials prices pushed to new highs. With input prices predicted to rise by 1.8%, it is not surprising to see some pull-through as manufacturers attempt to maintain profit levels and recoup on output. The second quarter, after all, saw oil prices that spiked to record levels and never stabilized below $70 a barrel. In addition, with costs of other raw materials climbing, output prices are hardly in a position to remain immune from the current inflationary cycle. Rising prices, are, however, a serious matter for New Zealand, which saw inflation increase by 1.5% on the quarter to the highest annual rate in over five years. With interest rates already at all-time highs, the Reserve Bank of New Zealand may have few tools left to help slow the consistently escalating price level.

Previous: Producer output prices rose 0.9% in the first quarter, showing a four percent increase from a year before. Higher crude prices helped input costs jump by 7.2% annually as electricity costs continued to rise, but also boosted output prices, as domestic generators were able to increase their prices. Output prices were still held at fairly low levels as prices received for livestock, a major New Zealand industry, dropped nearly 10% on the year. However, it remains a matter of time until higher energy and raw materials costs force a rise in output prices, even as inflation remains a major New Zealand concern.

Japanese Tertiary Index (JUN) (23:50 GMT; 19:50 EST)
Consensus:          0.1%
Previous:               0.5%

Outlook: The Japanese Tertiary Industry Index, which tracks services from travel to entertainment, is expected to expand for the third straight month as a low jobless rate and strong wage growth continue to fuel the consumer.  The world's second-largest economy grew at a 3.1 percent annualized pace in the first quarter as corporations spent freely, enjoying accommodative monetary policy.  Lingering around eight-year lows, the unemployment rate has confidence among non-manufacturers at the highest level in 14 years, a report said in June.  Signs of non-manufacturing expansion are of particular importance to the Japanese, which will need to turn to domestic demand in the months to come in order to ensure prolonged expansion, as export growth is threatened by a downturn in the United States and budding strength in the currency from potential rate increases.

Previous: Japanese economic sectors dealing with services unexpectedly grew in May, led by demand for spas and beauty care, which reflects an increasingly affluent consumer.  A 0.5 percent monthly gain followed April's 1.6 percent expansion, which was the highest in over a year.  Growth in services prompted some prominent economists to recognize a revival in consumer spending which has been a major obstacle to sustainable growth in Japan, as the Central Bank lifted rates from zero last month.

UK Consumer Price Index (JUL) (08:30 GMT; 04:30 EST)
                              (MoM)         (YoY)
Consensus:              0.0%           2.4%
Previous:                  0.3%           2.5%

Outlook: Monthly inflation in the consumer basket for the United Kingdom is expected to remain unchanged following June's 0.3 percent rise. Although gas and electric prices rose steadily during the month, lower clothing and food item costs are likely to counterbalance any upside bias. The monthly change is predicted to result in an annual pace of inflation of 2.4 percent, down from June's nine-year high 2.5 percent reading. Even though a slight cooling of pace for July CPI is positive for the UK economy, risks still exist.  Already the annual rate would remain well above the BOE's target inflation rate of 2.0 percent.  However with energy prices showing little chance of seriously deflating combined with the recent upturn in the housing market, there are obviously a number of factors that could easily have pushed the balance of price stability.  In fact, in the central bank's quarterly inflation report, the group said inflation was likely to remain well above their target rate into 2007, possibly suggesting further policy tightening could be in store.

Previous: In June, inflation quickened to 0.3 percent, pushing the annual measure of CPI well over the Bank of England's target of 2.0 percent.  In fact the annual pace of price growth topped 2.5 percent, matching the fastest pace in nine years.  The acceleration was apparently significant enough to prompt the Bank of England to unexpectedly lift the overnight lending rate by another 25bp to 4.75 percent.  As rising energy prices fail to relent, price increases are starting to slip into a broader category of goods and services, as demonstrated by rising PPI and PMI survey data.

US Producer Price Index (JUL) (12:30 GMT; 08:30 EST)
                               (MoM)          (YoY)
Consensus:              0.4%             4.5%
Previous:                  0.5%             4.9%

Outlook:  Prices received by US producers for their goods are expected to grow another 0.4 percent in July, putting the gauge up 4.5 percent on an annual basis.  The reading will show that inflationary pressures will persist in the US even as Fed officials warn the economy of a slowdown.  Energy prices will once again be the key contributor to inflation, as exemplified in the divergences between core and headline CPI indices.  Food prices are also expected to grow, but many discretionary goods such as autos and computers should fall as increased foreign competition prevents companies from passing on costs, which is being seen in increased discounts from US automakers.  The Federal Reserve hopes to see the lagged effects of its hawkish policy in inflationary numbers, as it has already seen in output reads.  Sustained inflation, amid slowing growth, could leave the central bank with some difficult choices in months to come.

Previous: The U.S. Producer Price Index rose in June by 0.5 percent, followed by a 0.2 percent gain in May.  Growth in the inflationary gauge was led by prices in food, energy and automobiles while the core PPI, which excludes food and fuel, advanced only 0.2 percent.  Higher energy prices, including heating oil and gasoline, have allowed many companies to blame revenue shortcomings on energy woes this earnings season.  Additionally, intermediate goods were up 9.3 percent annually in June, the highest since October, while prices of raw materials were up 8.6 percent.  Higher prices paid early in the production stream, stirred by commodities, made for another 0.2 percent increase in the consumer price index, putting it even further above Bernanke's comfort zone.

US Empire Manufacturing Survey (AUG) (12:30 GMT; 08:30 EST)
Consensus:             14.9
Previous:                  15.6

Outlook: The New York Empire State Survey numbers are expected to fall for the second consecutive month to 14.9 from July's 15.6 reading, potentially indicating an overall shift in region's manufacturing activity. Disappointing employment numbers, building inventories, lower than average sales, and rising energy prices all remain risk building up behind Augusts' forecasted slump. The New Orders index has steadily dropped over the past few months and currently sits below 10.0, the lowest level in over a year. Furthermore the inventories index printed a negative read for the second consecutive month. Although general business conditions are still positive, recent sharp drops in the Empire Manufacturing index demonstrate a discernible strain on the US economy and maybe one more indicator weighing into the Fed's difficult decision surrounding the future of interest rate policy

Previous: The Empire Manufacturing index for July indicated that conditions for New York manufacturers continued to improve from June, but at a much slower pace. The data showed a near 13.0-point drop from June's 29.0 release, while holding above the 0.0 expansionary/contractionary level at a disappointing 15.6.  The sharp drop in numbers from June to July was most likely due to heavy flooding in the region as new orders and shipments dropped to fresh lows on the year. Also, July's monthly New Orders plummeted to 10.3 from 25.8 in June while shipments took an equally devastating blow, falling to 11.3 from 30.3.

US Net Foreign Securities Purchases (TICS) (JUN) (13:00 GMT; 09:00 EST)
Consensus:         $65.0B
Previous:              $69.6B

Outlook: Net Foreign Securities Purchases are expected to decline in June, although higher interest rates could continue to draw investors. After last month's unexpected jump in investment from foreign sources, the Federal Reserve's additional 25-basis point hike for the month likely enticed more interest in US treasury assets. However, there remain many worrisome signs for TICS numbers, not the least of which was June's marked dip in the US stock markets. Continuing May's sharp equities downturn, the Dow languished below 11,000 for most of the month, and the S&P 500 followed suit, falling almost 6 percent. Although many had relied on the predicted "flight to quality" to boost American stocks as emerging markets declined, evidence mounted that the effects would be weaker than expected. In addition, as the US economy displayed myriad signs of a slowdown and GDP estimates saw repeated revisions to the downside, the attraction of stable US assets is likely to diminish as investors look to other economies that are in a earlier stage of economic expansion.

Previous: May's TICS data came in higher than the month before as investors diverted cash from declining emerging markets to more secure US securities. With stock markets in the developing world falling dramatically, and oil prices holding tight above $70 a barrel, low-risk American bonds became more popular as a safe-haven for capital collection. In fact, May saw purchases of US treasury bonds rise by over $10 billion, with government agency bonds doubling from the month before. The data did beat expectations by a significant margin, and more importantly, came in high enough to outstrip the US shortfall in the trade of goods and services. However, with June's TICS number barely expected to cover the $65 billion gap in the trade balance, the US must continue to make itself attractive to foreign investors.

Richard Lee is a Currency Strategist at FXCM.