This Week's Top 10 FX Events

In a week that will be light on crucial economic data, traders will focus on a sequence of meetings of the Eurogroup, G7 and the IMF for details on the next steps to contain the EU debt crisis and to spur the slowing global economy.

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. EUR: Eurogroup Meeting, Mon., Oct. 8, all day event.

At their meeting which takes place a couple weeks ahead of the EU Summit on October 18-19, finance ministers of the euro-area will discuss the progress of the Troika negotiations in Greece as well as how to proceed should Spain finally decide to ask for financial assistance. The ESM permanent rescue fund is also expected to be activated at this meeting. With the Troika report still not ready to be released and with the Spanish government not in a hurry to request a bailout, the event carries a certain amount of risk for the EUR, especially if the Eurogroup fails to deliver a fresh new shot of optimism that the euro-area is making progress towards resolving the EU debt crisis.

2. CHF: Swiss CPI- Consumer Price Index, the main measure of inflation preferred by the Swiss National Bank, Mon., Oct. 8, 3:15 am, ET.

Inflationary pressures in Switzerland are forecast to increase by 0.3% m/m in September from the flat 0% m/m reading in the previous month. Although still in deflation territory compared with last year, the jump in the monthly inflation gauge is also expected to lift the yearly reading to -0.4% y/y in September from -0.5% y/y in August.

3. GBP: U.K. Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Tues., Oct. 9, 4:30 am, ET.

The report could bring another sign of economic weakness in the U.K. and could weigh on the GBP with overall industrial production forecast to decline by 0.4% m/m in August compared with the 2.9% m/m increase in the previous month.

4. USD: U.S. Federal Reserve Beige Book, the Fed’s official assessment on economic conditions in the 12 Federal Reserve districts of the United States, Wed., Oct. 10, 2:00 pm, ET.

The Beige Book report precedes the upcoming FOMC meeting on October 24 and is expected to confirm the signs of slowdown in the economy. With the Fed Chairman and the rest of policy makers willing to consider “further action by the Federal Reserve to ease financial conditions and strengthen the recovery and the job market”, a grim economic outlook could mean larger QE asset purchases and more pressure on the USD.

5. JPY: Bank of Japan Meeting Minutes, a detailed report of the bank’s latest meeting containing an outlook on economic policy and economic conditions, Wed., Oct. 10, 7:50 pm, ET.

With the Bank of Japan joining the Fed and other central banks and expanding its QE operations in September, the minutes would be likely to demonstrate the bank’s willingness to ease monetary policy further, especially if the persistent strength of the yen continues. The report should serve as a reminder that the Japanese central bank is standing ready to do more and should keep the yen gains capped ahead of the bank’s second meeting this month on October 30.

6. AUD: Australia Employment and Unemployment Rate, the main gauges of labor market conditions measuring job creation and unemployment, Wed., Oct. 10, 8:30 pm, ET.

In recent months, the Australian labor market has begun to feel the impact of the Chinese and the global slowdown. Although the economy is forecast to add over 4K new jobs in September compared with the loss of 8,800 jobs in August, the unemployment rate is expected to inch higher to 5.3% in September from 5.1% in the previous month. A weak employment report, especially if coupled with risk aversion and further decline in commodities, would increase the pressure on the Aussie dollar.

7. JPY: G7 Meeting, Thurs., Oct. 11, all day event.

Finance ministers of the G7 most industrialized nations will gather in Tokyo to discuss the slowing global economy and the latest developments in the euro-area. The meeting is not likely to produce anything concrete, but it would be interesting to see if Japan will make a plea to its G7 colleagues for a coordinated action to curb the persistent strength of the Japanese yen.

8. USD: U.S. Jobless Claims, an important gauge of labor market conditions measuring first-time claims for unemployment benefits, Thurs., Oct. 11, 8:30 am, ET.

The weekly jobless claims are forecast to inch slightly higher to 370K after the smaller than expected increase to 367K in the previous week. With the four-week average around 370K, there should be further improvement in labor market conditions if this trend is able to continue.

9. EUR: Euro Zone Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities, Fri., Oct. 12, 5:00 am, ET.

Following the declines in the German factory orders and industrial production, the overall euro-zone data is also expected to demonstrate weakness with a 0.5% m/m drop in industrial output in August compared with the 0.5% m/m increase in July.

10. USD: U.S. Consumer Sentiment, the University of Michigan's monthly survey of 500 households on their financial conditions and outlook of the economy, Fri., Oct. 12, 9:55 am, ET.

The preliminary estimate for October is forecast to show a pullback in the consumer sentiment index to 77.9 compared with 78.3 in September.