Let's take a look at the important economic releases next week that have an outsized importance.
German IFO: Germany is the driver for EU economic growth. So, last month, when the Bundesbank lowered its growth forecast for Germany, the markets caught a big shiver. The IFO number was also specifically cited by the Bundesbank when it downgraded German growth forecasts. The overall trend for expectations has been decreasing since the first of the year, with the business situation and climate numbers have moved lower in sympathy over the last few months.
US New Home Sales: the US housing market has been moving sideways for the last year. New home sales have been trending between the 400,000-460,000 pace. Ideally, we'd like to see sales move above this level.
Australian capital investment: Australia experienced a huge increase in raw material investment since 2005 while non-mining investment has been flat to slightly lower since the end of the recession. With China slowing down and moving away from their export led growth model, the Australian economy also needs to change its economic model by moving away from an economy dominated by raw material exports. However, with unemployment increasing, businesses have been reluctant to invest as they simply don't see strong enough demand to warrant an uptick in investment spending.
Japanese industrial production: This number has been trending lower since the first of the year, which has coincided with commenters raising questions about the viability of "Abenomics." It's possible this data series is simply going through the same pattern it did in 2012, when IP declined in conjunction with an inventory increase. However, with the sharp drop in Japanese GDP in 2Q14, this coincident indicator is suddenly far more important.
EU: inflation and unemployment. No two figures explain the current EU policy problem more than these two figures. Inflation has been creeping lower for the last year raising the very ugly specter of a deflationary cycle. And the high rate of unemployment typifies the overall malaise that has gripped the EU, highlighting the overall decreased macro-level demand.