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The Yen supplied a strong start for this busy week, with significant gains following the general elections. Canadian GDP and European  CPI Flash Estimate are the highlights of today. Things will get much busier later. Let’s see what’s up for today.

Japan’s  Prelim Industrial Production  surprised and rose by 1.8% instead of 1.4% that was expected. Also  Retail Sales  did well and fell by “only” 2.5%, less than 3.3% that was expected.

Later in Japan,  Average Cash Earnings are predicted to fall by 6.3%.  BOJ Governor Masaaki Shirakawa will talk later on, very close to the release of election results. Japan’s opposition won a landslide victory over the ruling party. The Japanese Yen is now rallying – USD/JPY now trades at 91.59.

Australia’s MI Inflation Gauge remained flat – that’s the first indicator of a very busy week in Australia.  Private Sector Credit is predicted to rise by 0.2%.  AIG Manufacturing Index will wait on the other side of the calendar.

For more on the Aussie, read the AUD/USD Outlook.

In Australia’s neighbor, New Zealand, the  NBNZ Business Confidence is an important gauge for the economy. It will impact the kiwi.

European  CPI Flash Estimate is expected to drop in an annually adjusted rate of 0.4%, less than last month’s fall. Deflation is hurting EUR/USD. Signs of hope in this field were seen last week in the German Prelim CPI.

For more on the Euro, read the EUR/USD Outlook.

Canadian monthly GDP is published today. After many months of contraction, June’s GDP is expected to rise. This is similar to the upwards revisions of second quarter GDP releases. For more on the loonie, read the USD/CAD Outlook.

The first American release in this bust week is Chicago PMI – it’s predicted to rise nicely from 43.4 to 47.4, still below the 50 mark.

That’s it for today. The pace of events will accelerate very soon. For more about the days ahead, read the Forex Weekly Outlook.

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