French Non-Farm Payrolls (QoQ) (3Q) (07:45: GMT; 02:45 EDT)
                          (Payrolls)              (Wages)
Consensus:           0.3%                     0.8%
Previous:               0.3%                     0.6%

Outlook:  French employment is expected to grow 0.3 percent in the three months through September as strong growth and change in employment laws stimulate hiring.  The third largest economy in Europe, French GDP hit a six year high 1.2 percent in the second quarter, on par with the pace of expansion in neighboring countries.  With strong foreign growth, exports of French-made goods could play a substantial role in production demand and stimulate strong labor trends in its own right.  Another event raising the brows of hiring managers was the governmentââ,¬â"¢s 2007 budget, which was accompanied by a few promising changes.  With a sizable net income in the governmentââ,¬â"¢s coffers, French Prime Minster Dominique de Villepin announced 7 billlion euros worth of tax cuts.  He went on to announce he was raising subsidies for low-wage workers and changing laws for firing current employees to encourage firms to take on new workers.  Already reflecting these benefits, the nationââ,¬â"¢s unemployment change reported a recent record 50,000 drop.  If hiring trends continue to improve in France, the inflation and capacity constraints resulting from consumer spending could encourage the ECB to stay its course of steady rate hikes.

Previous: Hiring activity hit a five year high in the second quarter of 2006 as strong economic growth encouraged business leaders to take on more workers to meet production needs.  Non-farm payrolls through the period grew 0.3 percent, the largest increase since the first quarter of 2001.  Over this same period, the commonly tracked unemployment change indicator reported three consecutive monthly declines of at least 34,000 people.  This was best track record in years.  Much of this improvement in the labor market follows flows from economic growth running at six-year highs.  Furthermore, as employment picked up and it became more difficult to find skilled labor, wages also rose.  Though not the 0.9 percent pace seen in the opening three months, second quarter earnings growth advanced 0.6 percent.

US Housing Starts (OCT) (13:30 GMT; 08:30 EDT)
Consensus:         1.680M
Previous:             1.772M

Outlook:  Housing starts in the worldââ,¬â"¢s largest economy are expected to have resumed their declines in October as demand falters under high sticker prices and dear mortgage rates.  Long steeped in a decline through much of this year, the housing market had shown signs of life in the prior month, along with an improvement in new home sales.  However, the weakening of the economy and persistently higher interest rates may have foiled any chances that this blip could evolve into a broader trend.  Though backing off somewhat in recent weeks, the most popular 30-year fixed rate mortgage grew to a recent record 6.8 percent, diverting a sizable amount of consumerââ,¬â"¢s disposable income.  Furthermore, despite the first drop in New home prices in over a decade in the last sales indicator, the relative level is still high enough to persuade Americanââ,¬â"¢s to rent.  In theory, potential buyers will steer clear of purchasing a new home if they believe the value of their new abode will decline over the first few years of their occupancy.  However, there are reasons to be skeptical.  Though the easing in mortgage rates and prices is still new, the shift is perceptible.  Also, from the buildersââ,¬â"¢ point of view, the October NAHB sentiment index finally lifted off its 15-year low with improvements seen in the Northwest and Midwest regions.  With US GDP already hovering at a multi-year low 1.6 percent pace over the third quarter, further weakness in the housing sector could undermine a rebound in consumer spending and turn a slowdown into a recession.

Previous: Housing starts marked a three-year low in the month of September as construction began on 1.772 million units on an annual pace.  The 5.9 percent jump in new developments accompanied a 5.3 percent rebound in new home sales.  Sales of previously unoccupied residences grew for a second month in September after those on the market saw that prices over the same period dropped by the most in over 35 years.  Breaking the overall report into regions, strength was seen in the Midwest and South, which more than made up for declines in the Northeast and West.  Despite this seemingly positive piece of data, the housing sector is still perceived as weak.  Backing up these beliefs recently was a the eighth consecutive slide in building permits to a five-year low, as well as a more dated look on housing performance.  In a yearââ,¬â"¢s time, the pace of new home starts has dropped 18 percent.   Seen as a potentially shallow rebound in a longer downtrend, the Fed began to voice its concern over the housing slump in its monetary policy statement, calling it one of the main burdens on the overall economy.

Richard Lee is a Currency Strategist at FXCM.