Retail sales in New Zealand are expected to have eased back slightly in May, weighed down by autos as rocketing gasoline prices deter buyers.

The only significant event risk on Friday will be from the release of the Canadian net employment change.

Currently, the markets are betting that the Bank of England will raise the Bank Rate by 25 basis points to 5.25 percent by the end of the year.

The UK trade balance is due for release tomorrow and weak numbers could drive the British pound below 1.96 against the US dollar.  The price action in the stock, bond and currency markets suggest that traders do not expect good news.

The US economic calendar is very light this week, leaving pending home sales as one of the few potentially market moving numbers.

Although the economic calendar is very light, Canada will be releasing what can typically be a very market moving indicator for the Canadian dollar – IVEY PMI. The IVEY PMI report measures the country’s manufacturing activity which tends to be a strong leading indicator for growth.

There is little doubt in the markets that the European Central Bank will raise rates on Thursday, as ECB President Jean-Claude Trichet remains the most hawkish central banker around.

Price growth at the factory gate in the Euro-zone is anticipated to accelerate even faster in May, as Eurostat is anticipated to report a 0.9 percent rise in the producer price index (PPI).  Furthermore, PPI is forecasted to surge 6.7 percent in May from a year earlier, the sharpest increase on record.

The Institute for Supply Management is expected to report at 10:00 ET that their survey of conditions in the manufacturing sector held below 50 – signaling contraction – for the fifth consecutive month at 49.0.

On Monday, Eurostat estimates for Euro-zone CPI are expected to show that inflation accelerated at an ever faster clip of 3.9 percent in June.