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The Trading Week: June 14 - June 18

|Includes: CNY, iPath EUR/USD Exchange Rate ETN (ERO), EUFN, JYN, UDN
June 11, 2010 ( – Series of important measures of inflation and industrial activity from several of the largest economies in the world will contribute to an interesting week, which could provide more evidence to support some economists’ forecasts that we may be “at the start of a bear market”.  

In preparation for the new trading week, here is a list of the Top 10 spotlight economic events that every currency trader should pay attention to. 

1.    EUR- Euro-zone Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Mon., June 14, 5:00 am, ET.

Industrial production is expected to slow to 0.7% in May from 1.3% in April, but the recently reported better-than-expected German factory orders and manufacturing output may contribute to a positive surprise with stronger industrial activity in the Euro-zone.

2.    JPY- Bank of Japan Interest Rate Announcement, Tues., June 15, expected around 12:00 am, ET.

The Bank of Japan is not likely to change its record low interest rates policy, but traders should be on the lookout for signs that the bank may be giving in to political pressure to fight deflation more aggressively. Any announcements of further quantitative easing measures from the Bank of Japan could have a negative impact on the JPY. 

3.    GBP- U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, Tues., June 15, 4:30 am, ET.

The U.K. inflation in April was at 3.7% and while this CPI report may show inflationary pressures subsiding a bit to 3.5% in May, the decline may not be enough to bring the inflation gauge below the Bank of England’s 3.0% ceiling.

4.    EUR- Germany ZEW Economic Sentiment Index, a leading indicator of economic conditions and business expectations in the Euro-zone’s largest economy, Tues., June 15, 5:00 am, ET.

The German ZEW Center for Economic Research survey could show further improvement in economic sentiment to 48.7 from 45.8, despite of the EU debt crisis.

5.    GBP- U.K. Jobless Claims and Unemployment Rate, the main gauges of employment trends and labor market conditions, Wed., June 16, 4:30 am, ET.

Signs of strength in the U.K. jobs market could be positive for the GBP and the report may not disappoint with lesser 25,300 jobless claims in May than the 27,100 claims in April and the unemployment rate forecasted to remain unchanged at 8%.

6.    EUR- Euro-zone HICP- Harmonized Index of Consumer Prices, the main measure of inflation in the Euro-zone and the European Union’s equivalent to the CPI- Consumer Price Index, Wed., June 16, 5:00 am, ET.

The rising trend in inflationary pressures in the Euro-zone may come to a halt with both inflation gauges remaining flat: CPI at 1.6% and Core CPI at 0.8%, same as the previous month’s readings.

7.    USD- U.S. Housing Starts, a leading indicator of housing market activity measuring construction of new residential properties, Wed., June 16, 8:30 am, ET. 

The U.S. housing market may continue to show signs of improvement as the housing starts are expected to increase to 630 K in May from 610 K in April.

8.    USD- U.S. Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Wed., June 16, 9:15 am, ET.

The manufacturing sector has been a leader in the U.S. economic recovery and the report may confirm that view with industrial output rising by 0.9% in May from 0.8% in the previous month and with capacity utilization up to 74.6% from 73.7% in April.

9.    CHF- Swiss National Bank Interest Rate Announcement, Thurs., June 17, expected around 3:30 am, ET.

Since the Swiss National Bank is not likely to raise rates, perhaps the most interesting part of this announcement will be the bank’s position on the continuous strength of the Swiss franc and the policy makers’ willingness to proceed with further currency market interventions.

10.     USD- U.S. CPI- Consumer Price Index, the main measure of inflation in the world’s largest economy, Thurs., June 17, 8:30 am, ET.

With the Fed’s preferred PCE inflation gauge indicating subdued U.S. inflationary pressures, the CPI report may have a similar outcome and may show inflation pulling back by 0.2% in May from 0.1% in April.

Disclosure: n/a