This week’s most important economic events will come from the US in the shape of the FOMC Interest Rate Statement, Existing Home Sales, New Home Sales and Gross Domestic Product.

With the Federal Open Market Committee already committed to a Federal Funds Rate of 0.00-0.25% there is basically no room for manoeuvre on the downside. However, the Fed could surprise the market and reduce the range closer to the BOJs 0.10 percent Overnight Call Rate.

With the Fed having used almost all of its ‘interest rate cut toolkit’ to stimulate the US economy there may be a change of focus to the outright purchase of long-term Treasury securities. This would attempt to bring interest rates lower across the yield curve, reducing the cost of a mortgage, in an effort to stimulate the housing market. However, with uncertainty in the jobs market and weak consumer confidence there may be continued weakness in housing for some time to come.

This Week
The first high volatility event of the week will be US Existing Home Sales, due for release at 15:00 on Monday. Data for December 09 is likely to show that the annualized sales pace of Existing Homes fell to 4.40M from 4.49M in November.

Tuesday will begin with Australian PPI at 00:30. Wholesale inflation for the fourth quarter of 2009 is expected to slow to 0.4% from 2.0% in Q3.

German Ifo Business Climate is scheduled for release at 09:00. The German economy is seen as a leading indicator for  Eurozone economic health  as a whole so the index will be closely watched. The index is expected to decline slightly from 82.6 to 81.0 for the month of January.

High volatility is also due from the UK at 11:00 on Monday. The Confederation of British Industry (CBI) Realised Sales indicator is expected to improve slightly to -53 from the previous -55.

At 15:00 the Conference Board’s US Consumer Confidence reading is due. As a precursor for consumer spending and overall economic health, this consumer confidence reading will be closely watched. The index is expected to improve slightly to 38.0 from the 38.7 seen for the month of December.

On Wednesday anticipation will be building for the FOMC Interest Rate Statement however, prior to this event Australian CPI will be released at 00:30 in the overnight session. Expectations are for a first quarterly fall in CPI to -0.4% after the 1.2% seen in Q3 of 2009.

At 19:15 we will see the highly anticipated Federal Funds Rate announcement with no change expected. The accompanying FOMC Interest Rate Statement is expected to create high volatility with comments on further “support for the functioning of financial markets” to be closely scrutinized.

The Fed isn’t the only central bank due to release monetary policy decisions on Wednesday with the RBNZ Interest Rate Statement also due. The Official Cash rate is likely to be cut to 4.00% from the 5.00% seen previously with economic growth in New Zealand under threat.

New Zealand will also announce Trade Balance data for December with the deficit expected to fall to NZD 100M from the 520M seen in November.

Thursday is set to be typically busy with the Nationwide House Price Index (HPI) due at 07:00. Expectations are for a 1.8% fall in house prices for January, following on from December’s 2.5 percent decrease.

There are several high volatility events due in the US session with Core Durable Goods Orders and Initial Jobless Claims both expected at 13:30. Core Durable Goods Orders probably fell by 2.6% in December following on from a revised 0.6% increase in November. Initial Jobless Claims came extremely close to the 600K mark last week (589K) with that number expected to fall slightly to 580K this week.

In the evening session New Zealand Building Consents will be released at 21:45 GMT. Consents increased by 4.3% in November of 08 after a fall of 19.7% the month previous.

The very last piece of key economic data from the US will be released at 13:30 on Friday. Gross Domestic Product (GDP) is expected to show a 5.4% decline in economic growth for Q4 2008. This is after a 0.5% decline in the third quarter.

Canadian monthly GDP will be released at the same time with a fall of 0.5% expected for November 08 after the -0.1 percent seen in October.

Please check our Economic Calendar for updates and actual releases as the week progresses.

With a plethora of high impact data due this week there should be no shortage of market volatility. However, the ECB’s  Minimum Bid Rate Announcement, US Retail Sales, CPI and UoM Consumer Sentiment look certain to dominate events.

This week
This week, high volatility events begin on Monday at 15:30 with the Bank of Canada Business Outlook Survey. The quarterly survey will be watched very closely due to the significance of the firms that are surveyed. A change in sentiment within these firms can be a precursor to future economic activity and economists will be looking for signs of job losses or a reduction in investment.

Also on Monday the NZIER Business Opinions Survey is due to be released. This is New Zealand’s equivalent to the BOC Outlook Survey so traders will be keen to see how businesses are likely to react to current economic conditions. This indicator came in at -19 in the third quarter of 2008.

On Tuesday our first major event will be Ben Bernanke’s participation in the Stamp Memorial Lecture Series organised by the London School Of Economics (LSE). He is due to speak about “Policy Responses to the Financial Crisis” at 13:00 in London.

At 13:30 US and Canadian Trade Balance data will be released. The US is currently running a trade deficit of $57.2B but this is expected to have improved slightly to $53.5B in November.

Canadian trade surplus for the month of November is expected to come in at CAD 3.3B after October’s 3.8B. Canadian trade surplus has been slowly eroded over recent months, falling from a revised $5.6B in September.

Building Consents from New Zealand will complete Tuesday’s events. The monthly reading for December will be closely watched following November’s 21.9% fall in approvals issued.

Australian Home Loans are due to be released at 00:30 on Wednesday morning. Data for November is expected to show a 1.0% increase in the number of new loans granted following on from a 1.3% increase in October.

Later in the day focus will shift to the US with Retail Sales and Core Retail Sales for the month of December due at 13:30. This data will be closely watched because it is an indication of consumer spending during the holiday season; largely regarded as the busiest in the retail sector’s calendar. A decline of 1.3% is expected in the Core number, following on from a 1.6% fall in November. The headline figure is expected to show a drop of 1.2% MoM after the 1.8% decline seen one month previous.

Thursday promises to be a very busy day, beginning at 00:30 with Australian employment data. Employment Change for December is expected to show that the Australian economy shed 20K jobs, following on from a reduction of 15.6K in November. The Unemployment Rate over the same time period is expected to have increased from 4.4% to 4.5%.

The most important piece of news of the day from Europe will be the combination of the ECB Interest Rate Announcement and the ECB Press Conference. Although the Minimum Bid Rate announcement itself is only regarded as a medium volatility event it cannot be denied that traders and economists will be watching it very closely. The ECB is expected to cut rates from 2.50% to 2.00%. Once this has been confirmed, attention will switch to the press conference for an insight into the decision. Traders will also be looking for clues to future interest rate moves. The ECB press conference is due at 13:30 GMT.

Also due at 13:30 is US PPI and Initial Jobless Claims. Wholesale inflation is expected to have declined by 2.0% in December, following on from a 2.2% decline in November. US Initial Jobless Claims came in slightly better than expected last week at 476K. However, this is still an indication that the US economy is in recession and a figure of 520K is expected this week.

Friday will be dominated by high ranking US data. We begin at 13:30 with the Core CPI. Economists are expecting an increase of 0.1% in consumer inflation for the month of December after a flat November.

The next piece of news to cross the wire will be TIC Net Long-Term Transactions. After a huge fall to $1.5B in October vs the $66.2B seen in September, net investments in US securities is only expected to recover to $2.0B for November.

To close the week we will see the University of Michigan Consumer Sentiment (preliminary reading). Economists are expecting the index to drop slightly to 59.5 from the revised 60.1 seen one month ago.

Wholesale inflation fell by 2.2% in November, the US Bureau of Labor Statistics reported today, completing a fourth straight monthly decline. The consensus estimate had been for a 2.0 percent drop following on from October’s record drop of 2.8%.

PPI MoM for the last 12 reporting periods

Leading the declines in November were energy prices. After a 12.8% drop in October, energy was down 11.2% for the month of November. Liquefied petroleum gas and home heating oil accelerated declines in November, down 25.7 and 23.3 percent respectively after 24.9 and 9.6% declines one month earlier. Declines slowed in residential natural gas and unleaded premium and mid-premium gasoline.

Prices for consumer foods came in unchanged after a fall of 0.2% in October. Within the index, eggs posted the sharpest monthly fall, down 18.2% with milled rice and pork both down 5.3%. Fresh fruit and vegetables were up by 2.1 and 3.8 percent respectively.

The Producer Price Index shows that wholesale prices are 0.4% higher than they were at the same time last year. However, this has fallen sharply from the peak of 9.9% in July and 5.2% just one month ago. Indeed, the current yearly figure is the lowest seen since January of 2007 and is further evidence that price pressures are falling away sharply in the US.

Elsewhere the Core PPI was up 0.1% MoM and inline with economists’ expectations. Traders had been expecting a moderation following the 0.4% seen in October. On a yearly basis the core number, which strips out the volatile food and energy components, is up by 4.2%.

Aside from the headline number for finished goods the index for intermediate goods fell by a record 4.3% while crude goods were down by 12.5%. Last month Intermediate goods dropped by 3.9% while crude goods fell by 18.6%.

The question on traders’ minds is whether the financial markets will continue to ignore poor economic data. Following the lack of decisive action on the back of Friday’s shockingly poor Non-Farm Employment report, it remains to be seen whether this week’s economic announcements will provide anything more than a knee-jerk price reaction seen at the time of release.

This Week
The first high volatility event of the week will be the UK’s PPI Input at 09:30 on Monday. Expectations are for a MoM decline in wholesale inflation by 2.9% in November after the -5.6% seen in October.

At 13:15 we are due to see Canadian Housing Starts for the month of November. Expectations are for an annualized number of 194K, down from the 212K reported for October.

At 14:00 (15:00 CET) ECB President Trichet is due to testify before the Committee on Economic and Monetary Affairs of the European Parliament. The Quarterly Hearing usually takes the form of an introductory statement followed by a Q&A session.

On Tuesday morning we will see further high volatility from RBA Governor Glenn Stevens' speech at the Australian Business Economists Annual Dinner in Sydney. The event is scheduled to begin at 09:00 UK time.

This will be closely followed by the UK’s Manufacturing Production at 09:30. Expectations are for a 0.6% contraction in output in October after a 0.8% contraction in September.

At 10:00 the German ZEW Economic Sentiment number will be released. The index improved slightly last month to -53.5. However, economists are expecting a reading of -56.5 this time around.

Tuesday will also host the first of this week’s central bank interest rate announcements. The BOC Interest Rate Statement is likely to see the Overnight Rate slashed by 0.50 percent to 1.75%.

At 15:00 the first high volatility event of the week from the US is due. Pending Home Sales for October likely fell by 3.2% after Septembers 4.6% drop.

There is only one high volatility event scheduled for Wednesday and it comes during the overnight session. Australian Home Loans data for October likely saw an increase of 1.0 percent in the number of loans granted after the 2.7% fall in September.

Thursday will be a very busy day with the high volatility beginning in the overnight session. Australian Employment Change and Unemployment Rate are due for release at 00:30. Employment Change for November likely saw a fall of 15K jobs after the Australian economy added 34.3K in October. The Unemployment Rate, as of November, is likely to have increased to 4.4% from 4.3% in the previous month.

At 08:30 the SNB will be in focus as it announces the Libor Rate, releases its quarterly Monetary Policy Assessment and the Governing Board Members hold a press conference. High volatility can be expected for each one of these events with Libor midpoint likely to be shifted to 0.50% from 1.00%.

Focus will shift to North America at 13:30 with three high volatility events scheduled. The US Trade Balance will be released with a slight moderation to $53.5B in the trade deficit expected. At the same time Initial Jobless Claims will also be released. Economists expect 530K individuals to have filed for unemployment insurance for the first time during the past week.

At the same time, slightly overshadowed by the release from the US, the Canadian Trade Balance will also be released. The Canadian trade surplus is expected to have narrowed to CAD 3.2B from 4.5B in September.

Thursday will be rounded off by Core Retail Sales and Retail Sales from New Zealand. Core Retail Sales for October are expected to have increased by 0.8% MoM after a 0.5% decrease in September. For the same period Retail Sales were likely flat at 0.0% following on from a slight 0.1% increase a month earlier.

Friday will play host to a busy US session with some key data releases. At 13:30 Core Retail Sales, Retail Sales and the Producer Price Index will be hitting news wires. Core Retail Sales are expected to have fallen by 1.7% in November, with the headline Retail Sales number thought to have dropped by 1.9% in the same period. US PPI is also expected to fallen in November. Expectations are for a 2.0% fall in prices at the wholesale level after a similar 2.8% drop in October.

To round off the week we will see important consumer confidence data in the shape of the University of Michigan Consumer Sentiment number. Traders are expecting a reading of 55, relatively unchanged from last month’s final reading of 55.3.

US PPI fell by a record 2.8% in October the Labor Department reported today. Gasoline prices and the first drop in food prices in 8 months contributed heavily to the number.

The 2.8% fall in the Producer Price Index for finished goods was led by a 12.8% drop in Energy prices. This is much worse than the -2.9 and -4.6% seen in the previous 2 months. Foods were also down, by 0.2% on the month. This represents the first decline since February of this year.

On closer inspection we can see that gasoline prices crumbled by 24.9% in October after just a 0.5% decrease a month earlier. Leading the finished consumer foods lower was meat, down by 5.6% versus a 0.6% fall one month previous.

Today’s number leaves the Producer Price Index for the 12 months ended in October at 5.2%, down from last month’s 8.7%. The YoY number peaked at 9.8% in July this year.

US PPI MoM for the last 12 reporting periods

Despite the rapid decline in overall prices for finished goods, the Core number (excluding foods and energy) recorded a 0.4% MoM increase. This is inline with Septembers 0.4% increase, but only half of July’s 0.8% number.

Today’s news has done little to change trader’s view of a large interest rate cut from the Fed in December. It would seem that the markets are far more focused on the negative economic outlook than inflation data.

Currently, interest rate futures are fully pricing in a 0.50% cut in the Federal Funds Rate to 0.50% at the next meeting with a minimal chance of a 0.75% cut.

Last Week
Global markets stabilised a little last week as fears of a worldwide market meltdown were eased. Words of support from world leaders began to transform into solid action plans and in some cases actual cash injections.

However, worries over global recession were remembered after a host of poor economic data, especially from the US. Traders were especially worried about US Core Retail Sales, Retail Sales, Building Permits and Housing Starts. All four economic indicators missed expectations and this was reflected by the Michigan Consumer Sentiment number which fell from 70.3 to a lowly 57.5.

This Week
The economic calendar is slightly lighter than normal this week which may keep both stock and forex markets in consolidation. Key events will be the RBNZ and BOC Interest Rate Statements, Bernanke testimony and the BOE Meeting Minutes.

The first high volatility event of the week come from Australia at 01:30 Monday morning. The Australian PPI is expected to come in at 0.9%, compared to 1.0% in the previous quarter.

Later the same day we will see probably the most highly anticipated US event of the week with Bernanke’s testimony before the House of Representatives Budget Committee at 15:00.

At 22:45 we will see QoQ CPI data from New Zealand. Inflationary pressures are expected to moderate slightly from 1.6% previously to 1.5%.

Tuesday will begin with more high volatility from Australia. The October 7th Interest Rate Meeting Minutes are expected. Traders will be very interested in the discussions that took place at a meeting where the RBA surprisingly by cutting a full 100 basis points to 6.00%.

At 03:10 RBA Governor Glenn Stevens is expected to bring more high volatility to the markets when he speaks about the international economy in Sydney.

The BOC Interest Rate Statement is due at 14:00 with a 0.50% cut expected. This will bring the Overnight Rate to 2.00% from 2.50%. This will mean that the BOC has cut the rate by a full one-percentage point in the last 14 days.

We will see some late volatility from the UK as BOE Governor Mervyn King speaks in Leeds. He is due to speak at 20:10 UK time.

The flurry of Australian data continues on Wednesday with the Australian CPI. Economists are expecting an AUD negative release with 1.0% consumer inflation compared to 1.5% in the previous quarter.

At 09:30 we will hear from the BOE Monetary Policy Committee with the BOE Meeting Minutes (visual analysis) release. It is expected that the MPC voted unanimously to cut rates by 0.50% on October 8th as part of the coordinated global move.

The USD/ CAD will be in focus at 13:30 with Canada’s Core Retail Sales expected to crate high volatility. Core sales are expected to moderate slightly down to 0.3% growth in September from 0.4% in August.

Wednesday is rounded off by the second central bank rate announcement of the week. The RBNZ Interest Rate Statement is due at 21:00 with the Official Cash Rate likely to be cut by 1.00% from 7.50% to 6.50%. This mirrors the actions of the RBA earlier in the month who also cut by 1.00%.

The first high volatility event of Thursday will be from the UK. Retail Sales is due at 09:30. This data has been highly volatile of late and this trend looks set to continue. Retail Sales for September are expected to have fallen by 0.8% in September when compared to a 1.2% increase in August.

The Bank of Canada will take the spotlight for the second time in a week on Thursday. The BOC Monetary Policy Report is due at 15:30 and BOC Governor Carney will hold a press conference on the same topic at 16:15.

On Friday morning we are due to see preliminary GDP data from the UK. Gross domestic product is expected to show negative growth of 0.2% after the previous quarter’s number of 0.0%.

Canada’s Core CPI (visual analysis) is due at 12:00 with growth in September expected to mirror that of August at 0.3%. Traders pay most attention the Core number and so does the BOC.

To round off the week we have Existing Home Sales (visual analysis) from the US. This release will also be supported by our visual analysis and historical data tool. The sale of existing residential homes is expected to have increased slightly in September with 4.95M units sold compared to 4.91M in August.

The US Producer Price Index fell by 0.4% as expected in the month of September, the Department of Labor reported yesterday.

This is the second straight MoM decrease after it fell 0.9% in August. The annual rate now stands at 8.7%, down from the 9.6% seen in August.

Leading the index lower once again was energy. Prices in September declined by 2.9% after the drop of 4.6% in August. Crude goods were down 7.9% while intermediate goods fell 1.2%.

On closer inspection, the energy sector was hit by home heating oil and liquefied petroleum gas, down 13.9% and 11.1% respectively. Natural gas prices fell by a record 8.2%.

Core PPI, on the other hand, beat analysts expectations and posted a 0.4% MoM gain. This represents double what the market had been expecting. Over the past 12 months the Core index now stands up 4.0%, the fastest rate since February 1991.

Last Week
The most interesting price action last week came on Friday with the US Dollar giving back some of its recent gains. The Dollar sell-off was triggered by weaker than expected PPI and Retail Sales news and speculation that the Fed may have to cut interest rates further in order to stimulate the economy.

However, it is unlikely that the Greenback has formed anything more than a short-term top on healthy profit taking activity. The Fed may very well have to cut interest rates further; interest rate futures are currently pricing in a 40% chance of a cut by December, up from 0% a month ago. But the medium term outlook remains the same.

There is still no change in the view that other country’s economies (Eurozone and UK in particular) are slowing faster than in the US. This will lead to interest rate cuts from the respective central banks. Due to the fact that their rates are currently much higher than the Fed’s the Dollar will be supported by the theory that ECB and BOE interest rate cuts will be much more aggressive than any more from the Fed.

This Week
We begin the week on Monday with traders keen to see how Friday’s profit taking has been digested over the weekend. With no high volatility events planned it could be a quiet session, especially with the Japanese national holiday ‘Respect for the Aged Day’.

Monday’s highlights are likely to be the Swiss double header at 08:15 with PPI MoM and Retail Sales YoY due for release. The Producer Price Index is likely to come in at -0.2% after last month’s 0.5% increase. Retail Sales are expected to show a sharp increase with expectations at 2.3% compared to the yearly figure released last month of 0.7%.

Later in the day we are also likely to see some volatility from the US with the Empire State Manufacturing Survey, Capacity Utilization Rate and Industrial Production set for release. All three indicators are likely to show evidence of a waning US economy. The Manufacturing Survey will probably come in at 1.5 vs 2.8 last month, Capacity Utilization will fall to 79.6% from 79.9% and Industrial Production probably contracted by 0.3% last month.

In the early hours of Tuesday morning we will have our first high volatility event of the week. The RBA Monetary Policy Meeting Minutes will be released with traders keen to see how September 2nd’s meeting unfolded. The decision was taken at the time to leave the cash rate unchanged at 7.00%.

Tuesday will play host to four very big announcements with no less than 3 CPI numbers and the FOMC Interest Rate Statement all due. First up is UK CPI with consumer inflation expected to smash the BOE’s 2.0% target once again. Economists are predicting year-over-year inflation at 4.6%, up from the 4.4% in July.

Half an hour later, at 10:00 UK time, the Eurozone CPI will be released. The Consumer Price Index is expected to remain at 3.8% YoY. It should also be noted that the Eurozone ZEW Economic Sentiment is due for release at the same time. It is unlikely that this data will conflict significantly with the CPI but traders should be alert non the less. ZEW Sentiment is expected at -55.0 vs -55.7 last month.

The next high volatility event will be the US Core CPI MoM. The data came in at 0.3% last month with 0.2% expected this time.

Half an hour later at 14:00 we can expect the Treasury International Capital (TIC) Net Long-Term Transactions. The data, which measures the inflow of capital from abroad, is expected to show a surplus of $55.0B compared to $53.4B last month.

At 19:15 the FOMC Interest Rate Statement is due. The Federal Funds Rate is expected to remain at 2.00% with traders watching the language in the accompanying statement very closely. The focus will be on any change in the language that may allude to a rate cut before the end of the year.

Wednesday will see the release of the BOJ Interest Rate Announcement. Although it is not considered a high volatility event in itself with the Overnight Call Rate expected to remain at 0.50%, the BOJ Press Conference due before 08:00 will draw high volatility.

The next round of high volatility on Wednesday is due from the UK. The BOE MPC Meeting Minutes and Claimant Count Change will hit the wire at 09:30. Claimant Count Change is expected to increase slightly with 22.2K expected vs 20.1K reported previously. The MPC Meeting Minutes are likely to show a 1-1-7 vote split in favour of keeping rates unchanged at 5.00%.

Next up for the US is the release of Building Permits. Economists are expecting a figure of 925K residential permits issued compared to 937K last month.

On Thursday the first high volatility event will come from the UK at 09:30. Retail Sales MoM are due with a figure of -0.4% expected compared to a 0.8% increase last month. UK Retail Sales have been exceptionally volatile of late with numbers ranging from 3.6% to -4.3% over the previous 3 months. It would be very wise for traders to exercise caution around the time of this event; especially those focussed on short-term price swings.

At 13:00 the third central bank announcement is due. This time it comes in the shape of the SNB Interest Rate Statement. The Statement is comprised of the LIBOR Rate and the Monetary Policy Assessment. The general consensus is that the SNB will remain on hold at 2.75%.

The final high volatility event of the week will come at 23:45 on Thursday night from New Zealand. The Current Account balance is expected to have fallen further into negative territory to $ -3.4B from $ -2.2B last month.

Friday promises to be a quiet day, especially in the New York session. Early volatility will be seen when BOC Deputy Governor Murray speaks in Toronto and later on for the German PPI number. However, both of these events are only classified with a medium volatility rating.

Our Visual Analysis and Historical Data tool will come into use this week with the US Core CPI supported.

For all the latest numbers and updates please check our economic calendar and expect a breakdown of the US Core CPI right here on Tuesday.

The US Producer Price Index (PPI) came in worse than expected for the month of August, the Bureau of Labor Statistics reported today.

The PPI for Finished Goods came in at -0.9% MoM compared to the -0.5% that had been expected. This seasonally adjusted figure compares to the 1.2% and 1.8% increases seen in July and June respectively. Today’s number represents the first downturn in wholesale inflation since December 2007.

Looking at the year-over-year numbers we can see that inflation has risen by 9.6%, 2 ticks lower than the 9.8% YoY growth reported for July.

The main contributing factor to August’s number was the sharp fall in energy prices. Month-over-month energy prices were down by 4.6% compared to an increase of 3.1% in the previous month. Food prices remained firm posting a 0.3% increase for the second month in a row.

The Core PPI, which strips out the volatile Energy and Food components, came out in line with expectations 0.2%. This means that the unadjusted yearly rate of 3.6% remains at the highest level seen since May 1991. 

Elsewhere the lesser important Intermediate Goods posted -1.0% growth for July and Crude Goods a much larger -11.9%.

Today’s data left the US Dollar slightly lower across the board. At the time of writing the EURUSD is at 1.4222 compared to the 1.4000 it had been at 24 hours earlier. GBPUSD was up to 1.7943 from 1.7577. It should be noted however that Retail Sales data contributed to these price moves also.
 

Last week was a key week in terms of economic indicators. We saw central bank interest rate announcements from the RBA, BOC, BOE and ECB and key employment data from the US.

All interest rate announcements came in as expected but US employment data managed to surprise to the downside. Non-Farm Payrolls fell more than expected (-84K) for August and the Unemployment Rate jumped from 5.7 to 6.1%. This represents the highest rate since September 2003.

Despite this negative US economic news the Dollar remained firm, supported by carry trade unwinding and a further fall in oil prices. NYMEX crude oil posted a weekly low through the $110 level at $105.13.

This Week
Early market focus will be centred on a rumoured announcement from US Treasury Secretary Paulson due on Sunday evening. It is expected that he will announce a plan for the US Government to take control of Fannie Mae and Freddie Mac for at least a year.

This week will also play host to a 3-day OPEC meeting that takes place in Vienna. Running from Monday through to Wednesday, the main body of the programme is scheduled for Tuesday. Traders will be watching for any unscheduled announcements made to the press throughout the 3 days.

Monday begins with an RBA testimony before the House of Representatives Standing Committee on Economics. Lead by Glenn Stevens, the RBA will testify on the latest semi-annual economic outlook.

At 09:30 the UK PPI Input number is due for release. The number is expected to fall by 1.2% after a -0.6% reading for July.

Later in the day we have a high volatility event from Canada. Building Permits will be released and further contraction is expected. July saw -5.3% and a further -1.0% is expected from August.

Tuesday will bring us more high volatility with Australian data first up. At 02:30 we will see both Home Loans and Retail Sales. Home Loans posted a -3.7% for July and a month-over-month 0.0% move is anticipated for the month of August. Retail sales, on the other hand, are expected to post a mild recovery. July figures were reported at -1.0% but numbers for August should show a 0.5% increase.

In the UK session traders will be focussed on Manufacturing Production. A number of -0.1% is anticipated after a -0.5% report in the previous month.

Further Canadian construction data is due on Tuesday at 13:15. It comes in the form of the Housing Starts report and is expected to show 194K new residential constructions getting underway. This would be an improvement from the 187K annualized reported in August.

The first high volatility economic indicator from the US is scheduled for release at 15:00 on Tuesday. Pending Home Sales MoM are likely to have fallen by 1.2% in August after a 5.3% increase in July.

On Wednesday we will see the first high volatility event from the Eurozone. ECB President Trichet will testify before the European Parliament Committee on Economic and Monetary Affairs in Brussels.

Towards the end of the day (22:00) we have the RBNZ Interest Rate Announcement. It is expected that the RBNZ will cut interest rates for the second time in 2 meetings to 7.75%. This will be an interesting event because the last cut (happened back on the 23rd of July) surprised most market participants.

Thursday is often the busiest day in terms of economic releases and this week is no exception. For the second time in 3 days Australia leads the field with two high volatility events at 02:30. This time Employment Change and Unemployment Rate are to be reported. Employment Change is expected to come in at 5.5K jobs created while Unemployment Rate could increase from 4.3% to 4.4%.

Thursday will also play host to the third central bank testimony of the week. The BOE MPC, including Mervyn King, will testify on the August 2008 Inflation Report before the UK Treasury Committee at 09:45.

At 13:30 we have a high volatility announcement from Canada and the US. Both countries will be reporting their latest Trade Balance figures. Canada is expected to report a surplus of $5.6B from $5.8B in the previous month while the US deficit is likely to increase to $58B from $56.8B previously reported.

Finally for Thursday we have Core Retail Sales and Retail Sales from New Zealand. Last month’s Core number came in flat at 0.0% while the raw number posted a 0.9% gain. This month data is expected at 0.2% and -0.3% for Core Retail Sales and Retail Sales respectively.

Friday will be dominated by high volatility data from the United States. At 13:30 we will see Core Retail Sales, Retail Sales and PPI (supported by our Visual Analysis tool). Core Retail Sales are expected to contract by 0.2% MoM while Retail Sales should be up by 0.2%. The Producer Price Index is expected at -0.5% after last month’s 1.2% gain.

At 14:55 we have the final high volatility announcement from the US and for the week in the shape of the preliminary University of Michigan Consumer Sentiment. Sentiment is expected to increase to 64 from last month’s revised figure of 63.

For full details of this week’s economic news and daily updates please see our economic calendar and economic speeches pages.