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. JPY - Bank of Japan Meeting Minutes, a comprehensive report of the central bank's meeting, offering an outlook on the economy, interest rates and future monetary policy, Tuesday, December 25, 6:50 pm ET.
Less than a month before the Bank of Japan's next meeting on January 21-22, the minutes are expected to confirm the bank's ultra-accommodative monetary policy stance, as well as the central bank's expectations for slow economic growth in the months ahead.
2. USD - U.S. Jobless Claims, an important gauge of labor market conditions measuring first-time claims for unemployment benefits, Thursday, December 27, 8:30 am ET.
Jobless claims have started to return to normal levels after the spikes caused by the effects of "super storm" Sandy and are forecast to stay in a range with a reading of 365K, compared with 361K in the previous week.
3. USD - U.S. Consumer Confidence, a measure of consumers' outlook on the economy, Thursday, December 27, 10:00 am ET.
The outlook of U.S. consumers is forecast to turn less optimistic, pushing the consumer confidence index lower to a reading of 71.0 in December from 73.7 in November.
4. USD - U.S. New Home Sales, an important gauge of housing market conditions measuring sales of new homes, Thursday, December 27, 10:00 am ET.
In another sign of recovery after last week's upbeat existing home sales data, sales of new homes in the U.S. are forecast to register an increase to 382K in November from 368K in October.
5. JPY - Japan Manufacturing PMI, a leading indicator of economic conditions measuring activity in the manufacturing sector, Thursday, December 27, 6:15 pm ET.
Not much optimism is expected to be instilled by the Japanese manufacturing sector, as the index is forecast to stay in contraction territory with a reading of 47.1 in December from 46.5 in the previous month.
6. JPY - Japan CPI - Consumer Price Index, the main measure of inflation preferred by the Bank of Japan, Thursday, December 27, 6:30 pm ET.
The Japanese national core inflation gauge is forecast to fall back in deflation territory with a reading of -0.1% y/y in November from the flat 0% y/y in October. With the index still far from the 1% inflation target and with the economy in a recession, the report could keep the JPY under pressure as the market continues to price expectations that the Bank of Japan might be forced into raising the inflation target to 2%, and could resort to more aggressive quantitative easing at the bank's next meeting on January 21-22.
7. JPY - Japan Retail Sales, an important gauge of consumer spending measuring sales at retail establishments, Thursday, December 27, 6:50 pm ET.
Falling domestic consumption is one of the main contributors to the ailing economy in Japan, but the retail sales might show some hopeful signs with an increase by 1.1% y/y in November, compared with the 1.2% y/y drop in the previous month.
8. EUR - Italy 10-year Bond Auction, Friday, December 28, around 2:00 am ET.
The Italian Treasury will sell its benchmark 10-year government bonds and traders will watch the auction results closely in order to find out if investors will demand higher premiums to hold the debt of the troubled nation facing political uncertainty ahead of the election in February. Rising borrowing costs and weak demand could weigh on the euro.
9. USD - U.S. Chicago PMI - Purchasing Managers Index, a leading indicator of economic conditions measuring activity in the area of Chicago, Friday, December 28, 9:45 am ET.
Activity in the Chicago region is expected to pick up the pace with an index reading of 51.2 in November compared with 50.4 in the previous month.
10. USD - U.S. Pending Home Sales, a leading indicator of housing market activity measuring pending home sale contracts, Friday, December 28, 10:00 am ET.
The last spotlight event of 2012 could end the sequence of U.S. data on a weak note with the pending home sales index forecast to decline by 0.3% m/m in November, following the record 5.2% m/m increase in October.