Eurozone Economy Continues to Slow (page 2 of 2)

Even though German producer prices grew by more than expected in June, the Eurozone trade deficit deteriorated materially in May, which came as a big surprise to the market.

Big week for the Pound

The pound has been at the whim of risk appetite and the US dollar for most of the week, but things will change in the coming week as the UK economic calendar is chock full of market moving data.

The country will be releasing their retail sales report for the month of June and the advance release of second quarter GDP.

After the big jump in May, we expect consumer spending to contract significantly - traders just need to be careful because the forecasts which are already low.

The Bank of England will also be releasing the minutes from their most recent monetary policy meeting. Although they left interest rates unchanged, it will be interesting to see if any of the monetary policy committee members leaned towards a rate change.

Australia, New Zealand and Canada look ahead to busy week

Like the British pound, the Australian, New Zealand and Canadian dollars will be in play next week with a ton of data due for release.

The Australian dollar has another chance at making a run for the 25 year high on producer prices Sunday night.

Inflationary pressures have been strong in countries around the world and Australia is no exception.

Canada on the other hand has retail sales and consumer prices due for release. Given the sharp rise in today's wholesale sales report, retail sales in May should be strong.

Consumer prices on the other hand could actually surprise to the downside given the slower growth in industrial product and raw material prices. Meanwhile there is a monetary policy decision in New Zealand.

Even though we do not expect the Reserve Bank to alter interest rates, RBNZ Governor Bollard could make cautionary comments that could hurt the kiwi.

Bank of Japan growing more concerned about growth

The Japanese Yen crosses are higher today thanks to the recent recovery in US stocks.

The Bank of Japan has finally acknowledged what we all have felt for some time, which is that the Japanese economy is in trouble.

According to the latest BoJ minutes, the downside risks to growth now supersede inflation worries. USD/JPY has had a very strong correlation with the S&P 500 over the past year and we expect this correlation to continue to drive the price action of the currency pair in the coming week.