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Top 10 Forex Events Outlook: Feb. 18-22

Feb. 18, 2013 ( - Filled with a list of notable economic data from the euro-zone and the U.S., the week ahead could offer some early signs that the euro-area may be gaining traction while the world's largest economy loses momentum.

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. JPY- Bank of Japan Meeting Minutes, a detailed report of the bank's latest meeting containing an outlook on monetary policy and the economy, Mon., Feb. 18, 6:50 pm, ET.

Caving to political pressure, the Bank of Japan has changed its inflation target from 1% to 2%, as requested by the Prime Minister, and has announced open-ended asset purchases until that target is in sight. The minutes would serve as a reminder of the bank's commitment to aggressive monetary policy easing and could fuel further yen selling.

2. EUR- Euro-zone ZEW Economic Sentiment Index, a leading indicator of economic conditions measuring the outlook of financial experts, Tues., Feb. 19, 5:00 am, ET.

The ZEW institute survey is expected to show another month of improvement in economic outlook with a reading of 35.0 in February compared with 31.5 in the previous month.

3. JPY- Japan Trade Balance, an important gauge of economic activity measuring the difference between imports and exports, Tues., Feb. 19, 6:50 pm, ET.

Despite of the weaker yen which normally helps exporters, the consensus forecasts point to a widening trade deficit by 1,375 billion yen in January from a deficit of 641 million yen in December. Any signs that the Japanese economy is not improving will keep the yen under pressure on expectations that the government and the Bank of Japan could step up their efforts to devalue the currency and to spur economic growth.

4. GBP- Bank of England Meeting Minutes, a detailed report of the bank's latest meeting containing an outlook on monetary policy and the economy, Wed., Feb. 20, 4:30 am, ET.

In last week's Inflation Report, the Bank of England did not give an optimistic outlook on the economy and warned that the U.K. is set for low GDP growth for at least two years. Although the bank did not change its policy in February, the pound could stay under pressure if the minutes reveal that the Monetary Policy Committee is standing ready to expand the size of its QE operations if economic conditions deteriorate.

5. USD- U.S. Housing Starts, a leading indicator of housing market activity measuring construction of new residential properties, Wed., Feb. 20, 8:30 am, ET.

After several months of improvement, the U.S. housing market data could start to soften with the housing starts forecast to pull back to 923K in January, compared with 954K in December.

6. USD- U.S. FOMC Meeting Minutes, a detailed report of the Fed's latest meeting containing an outlook on monetary policy and the economy, Wed., Feb. 20, 2:00 pm, ET.

The Fed's current monetary policy stance is well known and the minutes will be likely to reassure the markets that the central bank will stay on the QE course until the unemployment rate drops below 6.5% or inflation rises above 2.5%. The report could weigh on the USD as the minutes confirm that the Fed will continue full speed ahead with open-ended quantitative easing.

7. EUR- Euro-zone Composite PMI- Purchasing Managers Index, a leading indicator of economic conditions measuring activity in the manufacturing and services sectors, Thurs., Feb. 21, 4:00 am, ET.

Although the euro-zone composite index is forecast to stay in contraction territory below the 50 boom/bust line, forecasts point to another month of improvement with overall manufacturing and services sector activity inching higher to 48.9 in February from 48.6 in January. The euro could get a significant boost if the index unexpectedly manages to climb above 50, which will send a promising signal of improving economic conditions in the euro-area.

8. USD- U.S. CPI- Consumer Price Index, the main measure of inflation in the world's largest economy, Thurs., Feb. 21, 8:30 am, ET.

The U.S. inflation gauge is forecast to move further away from the Fed's 2.5% threshold with a core CPI reading of 1.8% y/y in January, compared with 1.9% y/y in the previous month.

9. USD- 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, Thurs., Feb. 21, 10:00 am, ET.

Sales of existing homes in the U.S. are forecast to increase slightly to 4.95 million in January from 4.94 million in December, but there may be a downside risk to this report. Should existing home sales drop unexpectedly, we could witness another sign of slowing housing market activity.

10. EUR- Germany IFO Business Climate Index, a leading indicator of economic conditions measuring the outlook of businesses, Fri., Feb. 22, 4:00 am, ET.

The business outlook in the euro-zone's largest economy is forecast to improve with an increase in the Ifo index to 104.7 in February, compared with a reading of 104.2 in the previous month.