Australian Wage Price Index (2Q) (21:30 GMT; 01:30 EST)
                            (QoQ)           (YoY)
Consensus:           1.0%            4.0%
Previous:               0.9%            4.0%

Outlook: Wage growth is likely to speed up in the second quarter thanks to Australia's tightest job market on record. Strong Asian demand has helped boost hiring at mining companies and refineries, holding unemployment at thirty-year lows through most of the three-month period. The booming labor market is expected to boost wages from the first quarter's advance as competition intensifies for acquiring skilled labor workers amongst an available labor pool that has shrunken to 4.9%. However, consistently high oil prices and May's interest rate hike will likely prevent salaries from spiking to last year's unusually high levels as many companies will have to tighten their belts to conserve profit margins. Also aiding in this endeavor are Australia's new, more liberal labor laws that could help slow wage growth by decreasing firing restrictions. Still, with second quarter inflation rising to a 4% annual rate and labor demand as strong as ever, wage growth is still finding ample support upward pressures.

Previous: The first quarter saw wages rise by a smaller than expected 0.9%, after record pay increases in 2005 spurred continued inflation concerns. The Australian labor market began to tighten as the unemployment rate fell below 5.0%, leading to speculation that wages would begin to shoot higher, and carry the price level with it. The Reserve Bank of Australia was able to assuage some of that wage growth as interest rate hikes, combined with higher energy prices, limited corporations' ability to raise salaries in the first quarter. However, with inflation now rising at a 4.0% annual rate and Australia's labor shortage persisting through July, expect to see demand for workers drive wage increases in the second quarter.

UK Jobless Claims Change (JUL) (08:30 GMT; 04:30 EST)
Consensus:           5.0K
Previous:               5.9K

Outlook: United Kingdom Jobless Claims are expected to post a net 5,000-person increase in the month of July, slightly lower than June's surprising 5,900 addition. Although monthly claims are expected to decrease, the Claimant Count Rate should remain net unchanged at 3.0% as a steady reminder that the UK labor market may still be in a slowdown. A decrease in July's jobless claims, however, would be evidence of a firming job market as fewer people are looking for employment.  This could prove difficult however with higher energy prices and inflation-driven compensation packages continuing to be a major deterrent to a fast recovery as employers look to cut costs where they can. A strong bounce in near-term employment could be in the works though as growth picks up in other sectors of the economy, centered mainly on a reinvigorated housing market and a rebound in manufacturing and industrial sectors.

Previous: Jobless Claims in the month of June grew by 5,900, slightly higher than May's claims of 5,600 but still continuing a downward trend since February posted the fastest pace in a year with an additional 19,900 filings. Net employment in the UK has been driven down in the first quarter mainly because of a slumping economy and initial signs of a softening housing market, the economy's bread and butter. Rising inflationary fears also contributed to the labor market slowdown as rising costs have kept wages low and hours short as firms struggle to maintain the bottom line.

US Consumer Price Index (JUL) (12:30 GMT; 08:30 EST)
                            (MoM)           (YoY)
Consensus:            0.4%              4.2%
Previous:                0.2%              4.3%

Outlook: Consumer prices in the US are expected to advance another 0.4 percent in July, pressuring the Fed's decision to lay off its steady diet of interest rates at its August 8th meeting.  Among the goods putting upward pressure on the basket were gasoline prices, which fell the previous month, rose 10 cents to $2.98 in July amid summer traveling demand.  Stripping energy products from the headline figure, core prices are expected to extend their multi-year streak above the Fed's comfort zone.  Higher rents, which make up around 40 percent of the core reading, are being driven up as higher borrowing costs leave many Americans seeking out the rental alternative to high mortgage rates associated with buying.  Additionally, a recent report of import prices reported a 0.9 percent increase in the value of goods produced abroad. These factors aside, the Producer Price Index, which is often a leading indicator of the CPI, unexpectedly fell this morning which supports the Fed's predictions that slowing growth would in turn tame inflation.  With tomorrow's indicator arrives the next piece of the inflationary puzzle that could be a pivotal read for the central bank in determining whether inflation will abate in the normal course of the economy's fluctuations.  If the gauge does not follow the PPI's suggestions of less cost pass through, the Fed may need to consider another hike before the end of the year, and much of the dovish sentiment surrounding the decision to halt the rate cycle at 17 will likely disappear.

Previous: The US Consumer price index rose by 0.2 percent in June from a prior monthly reading of 0.4 percent.  Last month's inflation was the sixth straight increase in the index, suggesting the Fed faces inflationary pressures even as the economy slows.  The core reading was the most threatening, up 2.6 percent from a year earlier, which was the fastest increase since 2002.  On a monthly basis, core inflation rose for its fourth consecutive read, a statistic not seen since April of 1995.  Key contributors to the gauge were medical care, rent and airfare.  For an example in the airline industry, Southwest increased the estimate on what it will pay for jet-fuel and raised fares accordingly.  June's CPI was not enough to keep the Fed going, however, as they decided stay their hand and wait for past policy shifts to catch up to the economy.

US Housing Starts (JUL) (12:30 GMT; 08:30 EST)
Consensus:            1810K
Previous:                1850K

Outlook: July housing starts are expected to have fallen to their lowest level in two years, as demand for new homes continues its striking decline. Rising mortgage rates are suppressing home sales as continued increases in the price level eat away at consumers' spending power. After watching housing prices rise to staggering levels over the past few years, buyers are finally beginning to hold off on purchases, leaving construction companies with growing inventories of unsold homes. In addition, the National Home Builders Association reported confidence levels fell to fourteen year lows in July, indicating a lack of confidence that the housing market will see an immediate recovery. As the housing market cools and the Federal Reserve flirts with the possibility of more rate hikes this year, housing starts are now predicted to decline by more than 2 percent from June's, already low number.

Previous: Housing starts fell by 5.3 percent in June as rising interest rates continued to depress the US housing market. With the Federal Reserve raising the overnight interest rates to a four-year high and the consumer price level continuing to rise, potential homeowners have little reason to enter the market at this juncture. Sales of both new and existing homes fell from the month before as consumers waited for slower demand to begin to lower housing prices. With consumers adopting a "wait-and-see" attitude toward home ownership, and builders continuing to lower profit estimates for the year, housing starts are likely to extend their six-month slide.

US Industrial Production (JUL) (13:15 GMT; 09:15 EST)
Consensus:           0.6%
Previous:               0.8%

Outlook: Industrial production in the US, which accounts for output from the nation's factories, mines and utilities, is expected to report growth for the sixth consecutive month.  June's jump in durable goods has left companies with more confidence, as indicated in jumps in Richmond's Fed Manufacturing Index the Chicago PMI for July.  ISM Manufacturing also unexpectedly jumped to 54.7 from a previous 53.8, fueled by strong sales.  A critical pillar in industrial production rests with non-farm productivity, which rose more than expected in the second quarter, to offset gains in wages.  Nevertheless risk to the downside for industry in the world's largest economy is present, as higher interest rates are taking their toll on economic growth and activity.

Previous: Following a 0.1 percent increase in May, industrial production bested expectations of 0.5 in June, gaining 0.8 percent.  Much of the gain was attributed to the weather, as the second-hottest June in over a century called for increased electricity output.  Business equipment also rebounded, up 0.7 percent with more orders on semiconductors and communications equipment, a sign of confidence among managers.  In fact, manufacturers in the New York area reporting higher optimism for the next six months as orders, shipment and employment increased.  Production in autos and auto parts also rose 4.2 percent after a 0.8 percent decline. June's reading, along with a rise in capacity utilization, added speculation that the Fed would need to continue on its tightening cycle.

Richard Lee is a Currency Strategist at FXCM.