Japanese Machine Tool Orders (YoY) (SEP) (06:00 GMT; 02:00 EST)
Consensus:           4.8%
Previous:              4.8%

Outlook:  September Machine Tool Orders are likely to follow the same monthââ,¬â"¢s machinery orders, which rebounded 6.7 percent in August from Julyââ,¬â"¢s large 16.7 percent depression. Looking ahead, though the consensus calls for a repeat of August growth, it should rebound in the upcoming periods on the back of reduced energy costs.  This should in turn keep the longer-term upward trend intact. The export sector, and tool orders among them, has received tremendous help in recent months as the yen progressed towards record lows against the European regions currency while also steadily moving lower against the US dollar. One caveat that subsists for the near future however lies in the moderation of global growth that is predicted from many international sources.   Despite this however, the overall trend continues to be positive as as was supported by the recent machine orders indicator and the contribution to growth prospects for the sector will likely bolster the case for further normalization of interest rates going into the opening months of 2007.

Previous: Machine Tool Orders in the month of August came grew 4.8 percent as they corrected from Julyââ,¬â"¢s 2.2 percent print.  Orders have slumped since May when the volatile read reached a high of 15.3 percent. This periodââ,¬â"¢s high correlated with the highest level of domestic demand for tool orders in the year at 7.3 percent and an equally impressive foreign component at 24.4 percent. Seasonal changes have historically had an effect on data and now that winter is arriving the market could expect further upside potential going into 2007.

Canadian New Housing Price Index (MoM) (AUG) (12:30 GMT; 08:30 EST)
Consensus:          1.0%
Previous:             1.1%

Outlook:  Inflation in housing prices is expected to slow slightly over the month of August as Canadianââ,¬â"¢s put their plans to purchase a new residence on hold.  Both home starts and resales have trended lower in the months leading up to August as the pinch of higher mortgage rates has made the venture of owning a new home financially unfeasible for many Canadians.  In fact, in the month of August, the average five-year mortgage was 6.85 percent.  This was nearly a full percentage point higher than the same period a year ago.  Another contribution to expectations for gentler growth in the months ahead comes from the pressures of recent employment data.  Over the month of August, the net employment change fell for the third consecutive month, which had not happened since 1992.  Combined with stubbornly high petrol prices over the same period, this employment data likely wore on consumer confidence and further depressed housing prices.  If inflation in the housing sector moderates along with the consumer basket in the coming months, the central bank will likely grow increasingly sensitive to economic data and a cut could come within the realm of possibility.

Previous: Housing prices took a break from their aggressive acceleration to Juneââ,¬â"¢s 1.4 percent, recent record pace when the succeeding monthââ,¬â"¢s report printed at 1.1 percent.  Despite this cooling on the monthly level though, prices continue to rise at an aggressive clip on a year over year pace.  In the year through July, prices for new homes accelerated to a 10.8 percent pace.  The initial hints of stabilization in the housing sector of inflation is comparable to that seen in the overall consumer basket.  In the dayââ,¬â"¢s following the Bank of Canadaââ,¬â"¢s decision to keep lending rates unchanged at 4.25 percent, the key CPI number reported a substantial drop in the headline figure.  Since then, inflation has continued to moderate therein laid the groundwork for an eventual following from the housing market should employment and wages drop their support.

Richard Lee is a Currency Strategist at FXCM.