Trading Week Outlook: Oct. 10 - Oct. 14

Oct. 8, 2011 (Allthingsforex.com) – As the fourth quarter got underway with a bit more cautiously optimistic U.S. economic data, fresh new downgrades of Italy and Spain's credit ratings delivered a stark reminder that the end of the EU debt crisis is not yet in sight. In the week ahead, a list of consumer spending, employment, inflation and industrial production reports from the U.S., the U.K. and the Euro-zone will offer additional insights to economic conditions on both sides of the Atlantic. In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe. 1. GBP- U.K. Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Tues., Oct. 11, 4:30 am, ET. Despite of the unexpected rise in the U.K. Manufacturing PMI, industrial activity in the U.K. is forecast to keep lacking momentum with another 0.2% m/m drop in August, unchanged from the -0.2% m/m reading in the previous month. 2. USD- U.S. FOMC Meeting Minutes, a detailed record of the Fed's last monetary policy meeting that may provide an outlook on the economy, inflation and the Fed's future monetary policy, Tues., Oct. 11, 2:00 pm, ET. The minutes from the latest Federal Open Market Committee meeting will offer more details behind the decision to go forward with “Operation Twist” and would be likely to serve as a reminder of the Fed's gloomy outlook and the U.S. central bank's commitment to continue its ultra-accommodative monetary policy. 3. GBP- U.K. Jobless Claims and Unemployment Rate, the main gauges of employment trends and labor market conditions, Wed., Oct. 12, 4:30 am, ET. The U.K. labor market is expected to see an increase of up to 25,000 in the new claims for unemployment benefits in September, following the reading of 20,300 jobless claims in August, while the unemployment rate also inches higher to 8.0% from the previous reading of 7.9%. 4. EUR- Euro-zone Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Wed., Oct. 12, 5:00 am, ET. In the aftermath of the drop of the Manufacturing PMI in contraction territory, the Euro-zone industrial production could follow suit with a decline by 0.7% m/m in August from the 0.9% m/m increase in July. 5. AUD- Australia Employment Situation and Unemployment Rate, the main gauge of employment trends and labor market conditions, Wed., Oct. 12, 8:30 pm, ET. After a sequence of disappointing employment reports throughout the summer, the Australian labor market could finally show signs of improvement with up to 10,000 new jobs added in September, compared with the 9,700 jobs lost in August, while the unemployment rate remains unchanged at 5.3%. 6. USD- U.S. Jobless Claims, an important gauge of employment trends and labor market conditions, Thurs., Oct. 13, 8:30 am, ET. The recent decline to 391K in first-time applications for unemployment benefits was a positive surprise, however in the weeks to follow, jobless claims have climbed back above 400K and this trend could continue with another increase to 407K from 401K in the previous week. Economists estimate that jobless applications would need to fall to 375K and below in order to see a significant decline in unemployment. 7. CNY- China CPI- Consumer Price Index, the main measure of inflation in the world's second-largest economy, Thurs., Oct. 13, 9:00 pm, ET. Inflationary pressures in China are forecast to subside for another month with consumer prices expected to reach 6.1% y/y from the previous reading of 6.2% y/y, potentially easing some of the concerns that the Chinese central bank may have lost its grip on inflation. On the other hand, if the consumer price index spikes unexpectedly, the odds of another rate hike by the PBOC would rise. A decision to raise the benchmark rate further could cause additional slowdown in the Chinese economy, reducing demand for Australian raw material exports and could have a negative impact on the Australian economy and the Australian dollar. 8. EUR- Euro-zone HICP- Harmonized Index of Consumer Prices, the main measure of inflation preferred by the European Central Bank, Fri., Oct. 14, 5:00 am, ET. Following the flash estimate which delivered a surprising increase in inflationary pressures, the Euro-zone's main inflation gauge is forecast to confirm that consumer prices rose to 3.0% y/y in September from the flat 2.5% y/y summer readings. Although the European Central Bank refrained from cutting rates in October, with the economy slowing and the debt crisis still underway, the market could continue to price expectations of a forthcoming ECB rate cut, keeping the euro under pressure. 9. USD- U.S. Retail Sales, an important gauge of consumer spending measuring the total receipts at retail establishments, Fri., Oct. 14, 8:30 am, ET. Consumer spending in the U.S. is forecast to show some hopeful signs as retail sales rise by 0.4% m/m in September after the flat 0% m/m reading in August, while the core retail sales gauge, which excludes automobile purchases, also increases by 0.2% m/m in September from 0.1% m/m in the previous month. 10. USD- U.S. Consumer Sentiment, the University of Michigan's monthly survey of 500 households on their financial conditions and outlook of the economy, Fri., Oct. 14, 9:55 am, ET. The consensus forecasts are pointing to another slight improvement in the outlook of U.S. consumers with a preliminary consumer sentiment index estimate of 60.2 for October, compared with 59.4 in September. A more upbeat U.S. economic data throughout the month of October could help alleviate the market's concerns of a double dip and could reduce the odds for QE3 by the Fed.