Japanese All Industry Activity Index (MoM) (AUG) (23:50 GMT; 19:50 EST)
Consensus:    1.0%
Previous:      -0.4%

Outlook: The broad measure of Japanese industrial growth looks to have moved higher in August after a surprisingly poor result in July. Leading the rebound, the Tertiary Index moved from -0.2 percent in July to a much-improved 0.7 percent in the month of August. Likewise significant, Industrial production measures show that the sector grew at a healthy 5.9 percent year-on-year within the same period. Given that markets already know the bulk of information that goes into the All Industry Activity Index, surprises against consensus estimates are somewhat unlikely. Regardless, forecasts of a 1.0 percent gain show that Japanese producers have continued to grow at a healthy pace through the third quarter of the year.

Previous: The All Industry Activity Index declined for the second time in three months, as poor performance in the manufacturing and construction sectors brought down the headline figure. Indeed, there was little bullish news out of the report, as Tertiary Industryâ�,�”which accounts for 60 percent of the Indexâ�,��"�s valueâ�,�”posted a second consecutive decline. Regardless, analysts look to tomorrow's report to show that Japanese industry has recovered from previously lackluster performance. On balance, we should see the overall index return to its 2-3 percent annualized growth through the final months of 2006.

UK Gross Domestic Product (3Q A) (08:30 GMT; 04:30 EST)
                                    QoQ                 YoY
Consensus:                  0.6%                 0.7%                
Previous:                     2.7%                 2.6%

Outlook: Analysts predict that UK economic growth slowed on a quarterly basis, as government officialsâ�,��"� downward revisions to previous numbers weigh on market sentiment. Regardless, the UK remains in a strong position moving forward, as estimates of 2.7 percent annualized expansion would be the best since December of 2004. This beats corresponding EU expansion rates of 2.1 percent on the year, and party explains the British Poundâ�,��"�s fresh yearly highs against the European single currency. Moving forward, analysts predict that robust growth and mounting inflationary pressures will push the Bank of England to raise rates in the month of November. Indeed, two of the Monetary Policy Committeeâ�,��"�s 9 members voting for a hike at its last meetingâ�,�”considerable dissent given committeeâ�,��"�s previously unanimous votes.  Look to tomorrowâ�,��"�s report to solidify the case for higher rates through the end of the year.

Previous: The UK grew at a 0.7 percent quarterly pace through 2Q, 2006, as healthy consumer demand buoyed headline economic expansion. Initial reports showed two-year highs of a 0.8 percent headline figure, but a subsequent downward revision hurt overall outlook on Europeâ�,��"�s second largest economy. Revised estimates of government spending cut 0.1 percentage points on the figure, which initially caused a sell-off in the domestic currency, but cooler heads prevailed as the Pound remained strong against other major currencies. Tomorrowâ�,��"�s report should show a continued strong rate of growth in the UK economy.

Canadian CPI (MoM) (SEP) (11:00GMT; 7:00EST)
Consensus: -0.3%
Previous: 0.2%

Outlook: Headline CPI in Canada is expected to slip 0.3 percent in September, with the annual figure set to drop to a two year low of 0.9 percent. The projected slowdown in the headline figure is due to the September plunge in energy prices, while core CPI should rise 0.3 percent, though the annual rate is estimated to hold at 1.5 percent. Upside risk to inflation comes from wages, as average hourly wages increased 3.0 percent from September 2005, and in Albertaâ�,��"�s tight labor market, wages jumped 7.7 percent. Nevertheless, inflation currently sits right where the Bank of Canada wants it, at the 2 percent level, and they are unlikely to make any policy moves until 2007, when rates could go down.

Previous: Consumer prices in Canada slowed for the third month in a row to 0.2 percent in the month of August, bringing the annual rate to 2.1 percent, the lowest since November 2005. Meanwhile, the annualized rate of core CPI held at 1.5 percent. Inflation remained buoyed by an 8.1 percent rise in the cost of home maintenance while higher energy costs led to a 3.6 percent gain in transportation services and 4.7 percent rise in airfares, but computer and clothing prices helped mute gains. The deceleration of headline inflation supported the Bank of Canada's view that it won't need to raise interest rates again this year after seven hikes from September 2005 to May. Governor David Dodge said on September 16th that policy makers stand by a July forecast for inflation, minus the effect of a federal tax cut, to slow to the BOCâ�,��"�s 2 percent target in the second half of 2007.

Richard Lee is a Currency Strategist at FXCM.