Trading Week Outlook: April 18 - 23, 2010

With the Bank of Canada Interest Rate Announcement and Monetary Policy Report, the Canadian CPI and Retail Sales scheduled for release along with the Bank of England Meeting Minutes, the U.K. CPI and Gross Domestic Product, the week ahead could prove crucial for the future fate of the Canadian dollar and the British pound.

The stock market’s direction next week will continue to be guided by the U.S. corporate earnings, coupled with housing and industrial activity data.

In preparation for the new trading week, here is a quick look at the most important economic events that every currency trader should pay attention to.

Sunday, Apr. 18 will start the trading session with the U.K. Rightmove House Price Index, a housing market indicator of changes in home prices, at 7:00 pm, ET.

Monday, Apr. 19 will begin with the Japanese Household Confidence, a measure of consumer sentiment, at 1:00 am, ET.

News from Canada will bring the Canadian Foreign Securities Purchases, a gauge of the attractiveness of the Canadian dollar measuring foreign investments in Canada, at 8:30 am, ET.

The only U.S. economic report for the day will be the U.S. Leading Indicators of economic activity, at 10:00 am, ET.

The first spotlight event of the week will bring the New Zealand CPI- Consumer Price Index, the main measure of inflation, at 6:45 pm, ET.

The Japanese Tertiary Index, a leading indicator of economic conditions measuring activity in the services industries, will follow at 7:50 pm, ET.

The day will conclude with the Reserve Bank of Australia’s Meeting Minutes from the last monetary policy meeting that may provide an outlook on the economy and the bank’s future monetary policy, at 9:30 pm, ET.

Tuesday, Apr. 20 will start with the German PPI- Producers Price Index, the main measure of wholesale inflation experienced by manufacturers in the euro-zone’s largest economy, at 2:00 am, ET.

The euro-zone Current Account of goods, services and transfer of payments into and out of the region, will come at 4:00 am, ET.

One of the main spotlight events of the week will deliver the U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, at 4:30 am, ET, along with the U.K. RPI- Retail Price Index of the rate of inflation experienced by consumers when purchasing goods and services, also at 4:30 am, ET.

The U.K. inflation is at the top of Bank of England’s range, currently standing at 3%, and another push above the 3% ceiling could raise the odds of a sooner than expected rate hike by the Bank of England.

Another spotlight event from the euro-zone will follow with the release of the German ZEW Institute Economic Sentiment, a survey on the economic outlook and sentiment of institutional investors, at 5:00 am, ET.

The sequence of spotlight events will continue with the Bank of Canada’s Interest Rate Announcement, scheduled at 9:00 am, ET.

The current market consensus is that Bank of Canada will raise rates in the second half on 2010 and traders will look for confirmation of these expectations in the statement following the bank’s interest rate announcement.

The day will end with the Australian Leading Indicators of economic activity at 8:30 pm, ET.

Wednesday, Apr. 21 will begin with a spotlight event- the Bank of England Monetary Policy Committee Meeting Minutes that could provide an outlook on the economy and future monetary policy, at 4:30 am, ET, along with the U.K. Jobless Claims, an important gauge of labor market conditions measuring new unemployment claims, and the U.K. Unemployment Rate, also at 4:30 am, ET.

The Canadian Wholesale Sales made by wholesalers to retailers, used as a leading indicator of consumer spending, will follow at 8:30 am, ET.

The only notable U.S. economic release will be the EIA- Energy Information Administration Weekly Oil Inventories at 10:30 am, ET.

The day will end with a spotlight event- the Japanese Trade Balance of the difference between imported and exported goods and services, at 7:50 pm, ET.

Thursday, Apr. 22 will start with the Swiss Trade Balance of the difference between imports and exports, at 2:15 am, ET.

The German Manufacturing and Services PMI- Purchasing Manager's Indexes, measuring the activity of purchasing managers in the manufacturing and service sectors in the euro-zone’s largest economy, will be released at 3:30 am, ET.

A spotlight event- the euro-zone Manufacturing and Services PMI- Purchasing Manager's Indexes, two leading indicators of economic conditions measuring the activity of purchasing managers in the manufacturing and service sectors, will follow at 4:00 am, ET.

Another spotlight event will come from the U.K. with the release of the U.K. Retail Sales, an important gauge of consumer spending, at 4:30 am, ET, along with the U.K. Public Borrowing, a measure of credit debt and spending by public corporations, at 4:30 am, ET, and a leading indicator of the U.K. housing market- the BBA- British Bankers' Association Mortgage Approvals, measuring the number of newly-issued home loans, also at 4:30 am, ET.

The U.K. data sequence will continue with the CBI- Confederation of British Industry Industrial Orders Expectations, a leading indicator of industrial activity, at 6:00 am, ET.

News from Canada will bring the Canadian Leading Indicators of economic activity at 8:30 am, ET.

The U.S. economic reports will begin with the U.S. PPI- Producers Price Index, the main measure of wholesale inflation experienced by manufacturers and a leading indicator of consumer inflation, at 8:30 am, ET, and the weekly U.S. Jobless Claims, a gauge of labor market conditions measuring new unemployment claims, also at 8:30 am, ET.

One of the major spotlight events of the week- the U.S. Existing Home Sales, the main gauge of the condition of the U.S. housing market measuring the number of closed sales of previously constructed homes, condominiums and co-ops, will hit the newswires at 10:00 am, ET.

The sales of existing homes are expected to show an increase in housing market activity with up to 5.3 M home purchases from 5.02 M in the previous month.

The U.S. economic releases will continue with the U.S. House Price Index of the price changes of homes with mortgages backed by Fannie May (FNM) and Freddie Mac (FRE), at 10:00 am, ET, and the EIA- Energy Information Administration Natural Gas Inventories, at 10:30 am, ET.

Another spotlight event important for the fate of the Canadian dollar will bring the Bank of Canada’s Monetary Policy Report on economic conditions and the future of the bank’s monetary policy, at 10:30 am, ET.

Strong Canadian economic growth and rising inflation have prompted the Bank of Canada Governor Mark Carney last month to indicate that the bank could consider raising rates from a record low of 0.25 percent as soon as June 1, 2010.

Currency traders will also focus on another important event that morning- the Bank of Canada’s Press Conference following the Monetary Policy Report, scheduled at 11:15 am, ET, for hints of a timeframe when the rate hikes could begin.

The day will end with the Australian Import Prices, a gauge of inflation in prices of imported goods, at 9:30 pm, ET.

Friday, Apr. 23 will begin with the Japanese All Industries Activity Index of activity in the services industry combined with activity in the construction, agricultural, industrial and public sectors of the economy, at 12:30 am, ET.

A spotlight event from the euro-zone will bring the German IFO Institute Business Climate and Expectations Index, an early indicator of economic conditions and business expectations, at 4:00 am, ET.

One of the major spotlight events of the week will come with the release of the preliminary estimate of the U.K. GDP- Gross Domestic Product, the main measure of economic activity and growth, at 4:30 am, ET.

Faster U.K. economic growth in the Q1 2010 compared with the 0.4% growth in the Q4 2009 could help alleviate the concerns of an economic relapse in the U.K. and could be supportive for the British pound.

The euro-zone Industrial New Orders, a leading indicator of industrial activity, will hit the newswires at 5:00 am, ET

The sequence of spotlight events will continue with the Canadian CPI- Consumer Price Index, the main measure of inflation, at 7:00 am, ET, and the Canadian Retail Sales, an important gauge of consumer spending, at 8:30 am, ET.

The U.S. economic data will deliver a spotlight event- the U.S. Durable Goods Orders, a leading indicator of economic activity, measuring orders placed with domestic manufacturers for immediate and future delivery of factory hard goods, at 8:30 am, ET.

Durable Goods Orders may point to a slowdown in industrial activity with a flat reading of 0.0% m/m in March compared with 0.9% in February.

The trading week will end with another spotlight event- the U.S. New Home Sales, a gauge of housing market conditions measuring the number of newly constructed homes with a committed sale during the previous month, scheduled at 10:00 am, ET.

Consensus forecasts expect an increase in new home sales of up to 320 K in March from 308 K in February.