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In the week ahead, the Fed’s monetary policy decision will steal the spotlight from Europe for a day, but with the private sector involvement negotiations set to resume in Athens and a two-day Eurogroup meeting on the agenda, investors will continue to gauge nervously the odds of a Greek default and its implications for the economic and monetary union.

In preparation for the new trading week, here is a list of the Top 10 spotlight economic events that will move the markets around the globe.

1. EUR- Eurogroup Meeting of Finance Ministers, Mon., Jan. 23 and Tues., Jan, 24, all day events.

Only a few days ahead of the EU Summit on January 29, the two-day Ecofin meeting of finance ministers will set the stage for more discussions on how to deal with the next act of the Greek drama and contain the EU debt crisis. As the markets are still not completely convinced that the worst is behind, the EU leaders must deliver on their promises for bold solutions that would create the necessary firewall to prevent further contagion and safeguard larger economies.

2. JPY- Bank of Japan Interest Rate Announcement, Tues., Jan. 24, around 12:00 am, ET.

The Bank of Japan is not expected to make any changes to its accommodative monetary policy, leaving the benchmark rate unchanged in its record low target band between 0% and 0.10%. However, it will be interesting to find out if the bank will be forced into doing more quantitative easing as a tool to stimulate the economy which is losing steam.

3. EUR- Euro-zone Composite PMI- Purchasing Managers Index, a leading indicator of economic conditions measuring activity in the manufacturing and services sectors, Tues., Jan. 24, 4:00 am, ET.

In recent months, there has been a slight improvement in the purchasing managers’ indexes and this trend could continue as the manufacturing index rises to 47.4 from 46.9 and the service index inches higher to 49.1 from 48.8. Despite of that, both indexes are expected to remain in contraction territory.

4. AUD- Australia CPI- Consumer Price Index, the main measure of inflation preferred by the Reserve Bank of Australia, Tues., Jan. 24, 7:30 pm, ET.

Interest rate futures are pricing over 80% chance that the Reserve Bank of Australia will cut rates by another 25 bps as early as their next meeting and, if inflation is not an issue, the odds of a February rate cut will stay high. Inflationary pressures are forecast to subside to 0.2% q/q from 0.6% q/q, threatening the recent rally of the Aussie dollar.

5. EUR- Germany IFO Business Climate Index, a leading indicator of economic conditions and business expectations, Wed., Jan. 25, 4:00 am, ET.

Last week’s better-than-expected ZEW survey could also be followed by a stronger IFO index reading of 107.7 from 107.2, offering a glimpse of hope from the largest economy in the Euro-zone.

6. GBP- U.K. GDP- Gross Domestic Product, the main measure of economic activity and growth, and Bank of England Monetary Policy Committee Meeting Minutes, Wed., Jan. 25, 4:30 am, ET.

The preliminary estimate of the U.K. GDP is forecast to show the economy contracting by 0.1% q/q in the fourth quarter of 2011 after expanding by 0.6% q/q in Q3. A weak GDP report is likely to raise the odds for more quantitative easing by the Bank of England, while the minutes from the bank’s latest meeting should confirm the Monetary Policy Committee’s willingness to consider further expansion of the Asset Purchases Program. Both reports have the potential to become significant risk events for the GBP.

7. USD- U.S. FOMC Interest Rate Announcement, Wed., Jan. 25, 12:30 pm, ET.

Although resilient throughout Q4 2011, the U.S. economic data has revealed some soft spots with the recent series of weaker retail sales, a significant jump in jobless claims after the Holidays, and a widening trade deficit. In the days leading to the Fed’s two-day meeting on January 24-25, the U.S. economic reports must demonstrate that there is a sustainable and consistent improvement in the world’s largest economy. Otherwise, with the Fed Chairman, the Atlanta and the San Francisco Fed Presidents already warming up to the idea of the Fed “doing more” the market could see rising QE3 odds and could quickly begin to price expectations for additional stimulus at the expense of the USD.

8. NZD- Reserve Bank of New Zealand Interest Rate Announcement, Wed., Jan. 25, 3:00 pm, ET.

Despite of being perceived as the most hawkish central bank at the moment, the Reserve Bank of New Zealand might not need to hike rates after last week’s unexpected drop in the consumer price index. The benchmark interest rate is expected to remain at 2.5% and lower inflationary pressures have also diminished the odds of a rate hike in the near future. However, the bank has been known to surprise the markets a few times before, so a rate hike or at least a hawkish outlook should not be completely ruled out.

9. USD- U.S. Jobless Claims, an important gauge of labor market conditions, and Durable Goods Orders, Thurs., Jan. 26, 8:30 am, ET.

Following the spike to 399K, jobless claims have managed to register their biggest drop since 2008 with a reading of 352K. Next week’s report is forecast to show a bounce higher to 371K, but still below 375K- the number which economists estimate could signal a consistent improvement in labor market conditions and a future decline in the unemployment rate.

Orders for durable goods in the U.S. are forecast to rise by 2.1% m/m in December from 3.7% in November.

10. USD- U.S. GDP- Gross Domestic Product, the main measure of economic activity and growth in the world’s largest economy, Fri., Jan. 27, 8:30 am, ET.

In the aftermath of the Fed meeting, the second most-important U.S. economic event of the trading week will bring the preliminary estimate of the U.S. Q4 2011 GDP which is expected to show faster U.S. economic growth by up to 3.1% q/a in the fourth quarter, compared with 1.8% q/a in Q3 2011. The report will offer a great opportunity for traders to compare U.S. economic growth with the anticipated contraction in the U.K. and the Euro-zone.

Source: Trading Week Outlook: Jan. 23 - Jan. 27