New Zealand Gross Domestic Product (QoQ) (2Q) (22:45 GMT; 18:45 EST)
Consensus:  0.6%
Previous:  0.7%

Outlook: The New Zealand economy is forecasted to have grown at a moderate pace in the second quarter, as it continued to recover from a slight recession in the final quarter of 2005. There exist downside risks to consensus estimates, however, as record-high domestic interest rates boosted borrowing costs and put a crimp on growth. Likewise worrisome, inflation has persisted despite such high central bank rates, as soaring energy and metals prices strain the predominantly agricultural and service-oriented economy. Analysts do not expect any material pickup in expansion, with annualized growth for the second quarter at 1.9 percentâ�,�”the lowest number since 2001. Needless to say, any substantive surprises in the figure could send the Kiwi dollar further off of its recent 9-month highs.

Previous: The Kiwi economy expanded at a 0.7 percent pace in the first quarter, as a pickup in consumer spending buoyed otherwise lackluster growth. RBNZ governor Alan Bollard subsequently stated that the advance in private expenditure meant that inflation was unlikely to decline in 2006, leaving the bank with no option but to leave rates at all-time highs. Such a trend definitely placed doubt on the future of the New Zealand economy, with heightened inflationary pressures and moderating growth leading to fears of stagflation. Such a scenario is thus far unlikely to have played out in the second quarter, but economists continue to question the prospects for further expansion. Indeed, with predictions of annualized growth at 5-year lows, tomorrowâ�,��"�s second quarter GDP figures may put a damper on optimism for third quarter numbers.

Japanese Overall Household Spending (YoY) (AUG) (23:30 GMT; 19:30 EST)
Consensus:  -1.2%
Previous:  -1.3%

Outlook: Overall spending in Japan could hit a six month high of -1.2% during the month of August as the improving labor market could lay the groundwork for resurgence in consumption. The jobless rate dropped to 4.1 percent in July while the job-to-applicant ratio rose to 1.09 in July, the highest since June 1992. Manufacturers have taken the lead in hiring workers as automakers such as Suzuki and Honda plan to build domestic plants in order to keep up with competitors who are also expanding. Additionally, salaries have climbed in five of the past six months and should give a boost to disposable income. Furthermore, the most recent release of retail sales showed a surprisingly high 2.0 percent gain in the month of August after the figure dropped 1.6 percent the month prior. The improvement, however, was not so much a result of higher sales volume as it was a jump in fuel prices, creating downside risk for the household spending figure.

Previous: Japanese household spending improved on an annual basis to -1.3 percent in July from 1.7 percent in June, however, the monthly rate of change dropped 1.7 percent. Tightening labor market conditions and increasing wage pressures have failed to give a substantial boost to consumer spending thus far, as the annualized figure has remained negative since January 2006. The sub-par results have also put pressure on the Bank of Japan after they raised rates 25 basis points in July, despite the lack of substantial inflation or other major significant growth figures. The outlook remains positive however, as spending appears to be on a gradual uptrend.

Japanese National Consumer Price Index (AUG) (23:30 GMT; 19:30 EST)
                   (MoM)          (YoY)
Consensus:    0.4%          0.9%
Previous:       -0.1%          0.3%

Outlook: Japanese consumer prices are anticipated to climb 0.4 percent in the month of August after slipping 0.1 percent in July. A rise in CPI would be a welcome reading for the Bank of Japan, which has come under pressure as inflation has failed to warrant the MPCâ�,��"�s 25 basis point hike in July and effective ending of Zero Interest Rate Policy. Meanwhile, the core measure of CPI is anticipated to be slightly muted on a monthly basis at 0.1 percent in August. Property prices are likely to be instrumental to inflationary readings, as land prices in Japanâ�,��"�s three largest cities (Tokyo, Osaka, and Nagoya) rose for the first time in 16 years by an average of 0.9 percent. Additionally, Tokyo CPI for September is set to be released the same day and could be a sign of things to come for National figures next month. The headline data is estimated to slow to -0.2 percent from August and the core reading is predicted to rise to 0.1 percent on a mixture of falling energy costs and broader based price pressure.

Previous: Japanese National CPI posted weaker than expected in July at -0.1 percent on a monthly basis and 0.3 percent annually. The reading were disappointing, especially as the BOJ had just hiked rates and put an end to ZIRP, but the deceleration was a result of a change in the way the figure is calculated. BOJ Governor Toshihiko Fukui maintained his hawkish stance when he said on August 11th that changes in inflation calculations won't affect the bank's view that prices are rising after seven years of deflation. Furthermore, Economic and Fiscal Policy Minister Kaoru Yosano said that Fukui's policy stance will remain unchanged and â�,��"prices are rising, but the gains are gradual. You have to look at the trend,â�,� adding that deflation's end remains in sight.

German Retail Sales (AUG) (06:00 GMT; 02:00 EST)
                    (MoM)         (YoY)
Consensus:    0.8%         -0.3%
Previous:       -1.5%          0.0%

Outlook: Consumer spending in August could rebound 0.8 percent following Julyâ�,��"�s dismal reading of -1.5 percent. Next yearâ�,��"�s VAT hike to 19 percent from 16 percent not only has the potential to damage support for Chancellor Angela Merkel, but also threaten a domestic economy just recovering from unemployment that reached a record 12 percent last year. On the flip side, consumers are more likely to spend throughout the end of the year in order to avoid the higher taxes taking effect in 2007. Furthermore, consumer sentiment regarding current conditions continues to jump, increasing the probability that retail sales will rise in the short run.

Previous: Retail sales in Germany dropped for the first time in three months by 1.5 percent from June. The World Cup soccer tournament gave June sales a 0.8 percent boost, but the completion of the games resulted in slower demand for big ticket items such as televisions, as well as food and drinks. Additionally, an abundance of temporary jobs in the services sector were created due to the games and added to disposable income, however, the end of the event meant the end to the jobs and subsequent wages. Despite these factors, consumer confidence measurements by both ZEW and GfK have shown impressive current assessments and could indicate that response via consumption could be on the rise in coming months.

UK GfK Consumer Confidence (SEP) (09:30 GMT; 05:30 EST)
Consensus:  -7
Previous:  -8

Outlook: Britons confidence levels are expected to rise slightly through the month of September, leaving the proprietary GfK survey at a negative 7 read from negative 8 from the month before.  Given the number of factors that could have buoyed optimism for the period however, this consensus could prove conservative.  First of all, a natural rebound could be expected after the sharp drop in August following the unexpected rate hike from the BoE.  Furthermore, strong wealth indicators may figure into a happier crowd with July earnings accelerating to a 4.4 percent annual pace in July.  This was backed by both the HBOS house price and Rightmove housing prices indices rising 1.0 percent and 0.2 percent in August respectively.  Perhaps the most influential change in confidence though comes on the part of the sharp drop in gasoline prices over the past four weeks.  If confidence can rebound and in turn message spending habits, the central bank will find greater scope to consider a rate hike before the year is out.

Previous: UK consumer confidence fell to its lowest levels of the year in August as worries over a boost in lending rates and stubbornly high energy prices permeated the ranks.  The survey conducted over a population of 2000 people dropped from negative 4 in July to negative 8 in the following month.  Perhaps the most influential issue for people in the period was the unexpected rate hike from the BoE in the opening days of the month.  Another 25 basis points to the most basic lending rate will factor into borrowing habits and more importantly will sap wealth through costlier mortgage payments.  Another draw on optimism resided in the continually high energy prices.  Though prices for heating oil and gasoline began to fall in the second half of the month, the reduction wasnâ�,��"�t as pronounced for the consumer while the end of the survey came before too much of the drop was factored in.

US Personal Spending (AUG) (08:30 GMT; 04:30 EST)
                   (Spending)     (Income)
Consensus:      0.2%           0.3%
Previous:          0.8%           0.5%

Outlook: Americanâ�,��"�s are expected to have controlled their spending habits in the month of August as plummeting housing markets continue to wick away equity stores.  Recent indicators of existing and new home sales reported tepid results once again last month.  Even the surprising 4 percent increase in new resident purchases was tainted by a downward revision in Julyâ�,��"�s number to a three-year low 1.009 million units on an annual pace.  Bringing the problem to light, consumer were able to draw only $497 billion from home equity in the second quarter compared to $649 billion the period before.  This was the lagging result of two years of consistent rate hikes that have pushed mortgage rates to multi-year highs.  A side effect of this slide in housing has been a very visible drop in confidence levels in the consumer sector.  According to the Conference Board survey, optimism fell to a nine-month low in August, which was in turn the impetus behind a reserved 0.2 percent growth pace in retail sales and a sharp reduction in vehicle purchases.  One redeeming factor for spending habits for the months ahead, and potentially this month, however was the relief at the pump.  Gasoline prices have fallen from over $3 per gallon to below $2.50.  Should employment and wage trends hold strong, the return in spending could be quick in September.

Previous: Spending by consumers in the worldâ�,��"�s biggest economy grew 0.8 percent in the month of July, the most this year.  Americanâ�,��"�s have found the financial support for such liberal spending habits on the strong pace of incomes.  For the same month earnings rose 0.5 percent, while over a 12 month period the rate has grown 7.1 percent.  The reason for such optimism when gasoline prices continue to rise and the housing market slips, is obvious when looking to inflation rates.  While consumers are earning 7.1 percent more, the prices for the goods they are buying was only measuring 4.1 percent. The confidence behind putting their money back into the economy was so great that the savings rate has held in negative territory for the 16th consecutive months, meaning consumers are dipping into their savings in order to purchase goods.

Canadian Gross Domestic Product (MoM) (JUL) (12:30 GMT; 08:30 EST)
Consensus:  0.1%
Previous:  0.0%

Outlook: Growth in the worldâ�,��"�s eighth largest economy is expected to rebound back into positive territory for the month of July as consumer spending supported a jump in manufacturing profits.  The consumer donation to growth over the month was well seen from the point of housing and other sales gauges.  Housing starts for the month accelerated to a four month high 236,500 units, while new home prices rose an additional 1.1 percent.  More readily available were indicators showing a huge 3.0 percent jump in new vehicle sales and a surprise 1.5 percent jump in purchases at retailers.  Capital inflows from outside the boarder were also helping to boost overall economic strength.  While goods and services trade eased slightly, net investment ballooned to a C$3.14 billion surplus from a previous C$80 million deficit.  When all is said and down however, the biggest contribution could come from the factories.  Though they are contending with near record exchange rates in their sales abroad, the demand and prices paid for commodities from foreign sources likely generated a significant amount of revenue.  Looking ahead however, the near 28-year high in the currency will continue to weigh the export sector down, while cheaper energy and industrial metals prices quickly undercut profits. 

Previous: Rounding out the final month of the third quarter, GDP stalled in June, the first time read was unable to produce positive growth since September of last year.  With this poor monthly performance included in the longer periodâ�,��"�s records, second quarter growth slowed to 2.0 percent, the slowest annualized pace in nearly three years.  Over the three month period, consumer spending, exports markets and housing were all markedly softer.  The housing market was particularly sluggish with a 5.2 percent pace the after story of a 13 percent performance in the opening months of the year.  Comprising nearly 60 percent of the overall economy, consumer spending was the most sorely missed addition to growth numbers.  Furniture sales slowed from 12 percent to 4.8 percent, though the retail and wholesale industries were the top performance for the period with modest 2 percent growth.  In the end, it the steady pace of rate hikes from the BoC and suppressing nature of energy prices was quickly wearing Canadiansâ�,��"� ability to prop the economy down.

US Chicago Manufacturing PMI (SEP) (14:00 GMT; 10:00 EST)
Consensus:  55.7
Previous:  57.1

Outlook: The Chicago PMI reading likely turned lower in September, as slowing auto sales continue to strain manufacturing growth in the US Midwest region. Indeed, the theme is consistent with broader US industrial growth, as domestic auto manufacturers struggle to return to profitability, while the more volatile transportation sector has sold fewer planes in recent months. One of the few saving graces for US industry has been the drop in energy prices, with the average cost of oil significantly off of its August highs. What remains to be seen, however, is if such a moderation in input prices will itself be enough to keep production at a solid growth levels. Though consensus estimates above the neutral 50 figure call for a net gain in output, Chicago PMI readings on a continued downtrend point to the potential for industry-wide declines in the medium term.

Previous: Chicago production grew at a slower pace in August, as record-high oil prices hurt profit margins. With crude-oil trading north of 77 dollars per barrel, it is little wonder that the transport-heavy Chicago manufacturing sector would see lower output through the end of the summer. Indeed, if the Chicago-area industrial sector is to recover, it would need continued moderation in national gas prices to improve demand for domestic autos. To that effect, the US consumer has seen the average price of gasoline fall to the lowest levels in six monthsâ�,�”thereby improving overall consumer confidence.  It remains to be seen, however, whether this will be enough to lift national industry above its long-term growth trend in the coming year.

Richard Lee is a Currency Strategist at FXCM.