Japanese Leading Economic Index (SEP) (05:00 GMT; 00:00 EDT)
Consensus:         20.0%
Previous:              18.2%

Outlook:  Japanââ,¬â"¢s leading economic indicator index, used to forecast economic growth in the coming three to six months, is expected to rise to 20.0 percent.  The rebound off of a recent record low comes from a number of improvements in some of the components lifts optimistic expectations.  Contributing to a number of the sub-gauges that comprise the overall index was the jump in the trade balance.  In September, the surplus jumped to 1.014 trillion yen from 196 million the month before.  This strength buffers producer demand, durable shipments and small business sentiment with greater expectations for exports in the months ahead.  Elsewhere, small business confidence for the same period had also improved with a 1.1 point jump to 50.1 while machine orders over the month rebounded from Augustââ,¬â"¢s massive decline to print a 6.7 percent rise in orders.  Even a burgeoning housing market and strong advance in equities will help to boost the leading gauge.  On the other hand, the expected rise is predicted to be modest for a reason.  Weak consumer spending remains one of the biggest burdens for the overall economy as Japanese consumers struggle to make up for export fluctuations.  Should the leading index not improve from its lowly levels in the months ahead, the BoJ may set back another rate hike for some time.

Previous:  Japanââ,¬â"¢s index of future economic health held below the 50 percent level for the second consecutive month in August, suggesting growth in the months ahead will struggle.  A reading below the 50 predicts the economy will cool in the coming three to six months.  From the overall read, domestic and foreign demand were the lead culprits in dragging the index lower.   Japanese have reined in spending as wages and confidence levels drop.  Wages in August dropped 0.5 percent, leading the annual spending gauge to drop 4.3 percent.  Also removing its support from the economy was business confidence.  Particular pessimism for the export sector has led many firms to suggest hiring and production levels would fall in the months ahead.  The large industry Tankan report slipped from 24 to 21 percent while the small business confidence indicator slipped 6 points for the first contraction in six quarters.  Much of the dour outlook comes from the belief that slowing US growth will evolve into weak demand for Japanese produced products.

German Trade Balance (euros) (SEP) (07:00 GMT; 02:00 EDT)
                        (Trade)             (Current Account)
Consensus:       13.2B                     6.5B
Previous:            11.2B                    2.4B

Outlook:  Strong exports should help to maintain the German trade surplus in September, which is expected to post at 13.2 billion euros from 11.2 billion in August. Companies have benefitted from strong demand abroad, but downside risk could come from particularly weak industrial production and factory orders during the month. Nevertheless, firms have hired on more workers, which has brought unemployment to drop to a two and a half year low of 10.4% in October. However, strengthening demand within Germany for foreign products create downside risk for the trade report, as import growth may offset the export gains.

Previous:  German export growth unexpectedly fell in August, which helped bring the trade surplus to narrow to 11.2 billion euros from 13.2 billion euros in the month prior. Sales abroad, adjusted for working days and seasonal changes, slipped 0.1 percent from July, bringing the figure down to 73.64 billion euros. A stronger euro currency has only exacerbated the weaker demand from the US, as economic growth in the US dwindled to a paltry 1.6 percent in the third quarter.

Canadian Housing Starts (OCT) (13:15 GMT; 08:15 EDT)
Consensus:         216.0K
Previous:              209.0K

Outlook:  Groundbreakings on new Canadian residences are expected to have increased to a 216,000 annual pace for the month of October.  Investment in starts has softened from the first half of the year as high lending rates have begun to dissuade potential homebuyers.  However, the reported increase in net employment through the month of October could offer some proof of a modest rebound in the leading housing gauge.  Last month, employers added 51,000 people to the payrolls. Further upside risk for the starts data comes from September building permits, which are often a precursor to the starts, fell less than expected to the third-highest value ever of C$5.67 billion.  Monetary policy officials will likely keep their eye on housing trends in the months ahead to gauge whether domestic spending will help offset the contraction in export markets, or if the central bank will need to act in order to right the situation.

Previous:  Canadian new-home construction unexpectedly fell to the lowest in more than a year in September, as builders began work on fewer multiple-unit dwellings such as apartments. The annualized housing starts report hit a revised 209,000, down from 216,000 in August, and well below estimates of a rise to 222,000. With the average five-year mortgage rate about a percentage point greater than a year earlier at 6.85 percent at the end of August, home buyers felt the squeeze of greater borrowing costs and higher prices.

New Zealand Unemployment Rate (3Q) (21:45 GMT; 16:45 EDT)
Consensus:         3.7%
Previous:              3.6%

Outlook:  New Zealand joblessness is expected to have grown slightly in the third quarter as expensive lending rates and growing wages lead firms to ease aggressive hiring policies.  An increase over the period would lift the gauge off its lowest level ever, suggesting the health in the consumer and business sectors of the economy are feeling the pinch from slowing growth.  Key in predictions for the weaker employment over the period is the level of interest rates.  At 7.25 percent, New Zealandââ,¬â"¢s lending rate is the highest amongst sovereign economies with a top credit rating.  This levies high costs on domestic firms who have already had to spend more to attract skilled labor in the dwindling labor pool.  In the third quarter, wage growth accelerated 0.9 percent, its fastest pace on record.  However, despite the expected modest contraction in the unemployment rate, the labor market is expected to hold strong.  Recent indicators of business strength are promising supporters of this.  The NBNZ confidence read reported optimism in September grew to its highest level since March of 2005.  In another gauge, the quarterly NZIER read reported the highest levels of expected activity among firms in the three months ending in September since the final quarter of 2004.  If strong employment continues to prop aggressive consumer spending, the RBNZ may find it within their scope to consider another rate hike in the beginning of 2007.

Previous:  Unemployment in New Zealand was at its lowest level on record in the second quarter this year.  A drop in the rate from 3.9 percent to 3.6 percent came after employers hired 11 times more workers than had been expected.  Over the three months, 22,000 New Zealanders found jobs leading the inverse employment rate to grow 1.0 percent for the same period.  From the breakdown of the employment records, 25,000 new full-time positions were added to the books while companies shed 4,000 part-timers.  This left annual growth in permanent positions at a 3.6 percent pace and part-time job expansion at 1.3 percent.  

Richard Lee is a Currency Strategist at FXCM.