Top 10 Forex Events Outlook: June 18-22, 2012

As the early exit polls from Greece hit the newswires on Sunday evening, the trading week ahead will start with the markets pricing the outcome of the Greek election, while traders also keep an eye on the U.S. dollar and await the next move by the Fed at the FOMC meeting on June 19-20.  

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- Greece General Election, Sunday, June 17, all day event.  

Almost 10 million Greeks took to the polls for a second try to elect a new government. With no clear majority winner, we could see a repeat of the events following the first election when neither of the parties was able to form a coalition, leading to a political deadlock. Such a scenario would weigh on investor sentiment and on the euro. On the other hand, the ability to form a pro-bailout and pro-austerity government could provide further impetus for a euro relief rally.

2. GBP- U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, Tuesday, June 19, 4:30 am, ET.

In line with the Bank of England’s forecast, inflationary pressures in the U.K. have been subsiding in recent months and this trend is expected to continue with the consumer price index staying flat at 3.0% y/y in May, same as the 3.0% y/y reading in April. Lower inflation would not be an obstacle to additional easing by the Bank of England.

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

The ZEW institute survey is expected to confirm the deteriorating economic outlook in the euro-area with a larger decline in the economic sentiment index to -5.7 in June compared with -2.4 in the previous month.

4. USD- U.S. Housing Starts, a leading indicator of housing market activity measuring construction of new residential properties, Tuesday, June 19, 8:30 am, ET.

The first of the two housing market reports for the week is not expected to show anything spectacular. Housing starts are forecast to register a small increase to 725K in June from 717K in May.  

5. GBP- U.K. Jobless Claims and Unemployment Rate, the main gauges of labor market conditions measuring first-time claims for unemployment benefits and unemployment rate, Wednesday, June 20, 4:30 am, ET.  

Following last month’s better than expected drop in unemployment claims, the report is forecast to deliver a smaller decline by 3,100 in May compared with 13,700 in April, while the unemployment rate remains unchanged at 8.2%.

6. USD- U.S. FOMC Monetary Policy Announcement, Wednesday, June 20, 12:30 pm, ET.  

With the European Central Bank, the Bank of England, the Bank of Japan and other major central banks sitting on the sidelines despite of the political pressure, and the Fed Chairman not in a hurry to give any hints of QE3 during his testimony in front of the Joint Economic Committee in Washington, DC, it looks like the world’s central banks are in a "wait and see" mode when it comes to further easing. As Spain has now received an approval for up to 100 billion euros of bailout for its troubled banks and with the Greek election outcome unlikely to push the country out of the eurozone, the Fed might not feel that current conditions warrant additional monetary policy easing. This, of course, does not mean that QE3 is completely out of the picture. The Fed will be ready to deploy it if U.S. economic conditions deteriorate or if the EU debt crisis escalates.   

7. NZD- New Zealand GDP- Gross Domestic Product, the main measure of economic activity and growth, Wednesday, June 20, 6:45 pm, ET.  

After expanding by 0.3% q/q in Q4 2011, the New Zealand economy is forecast to grow by 0.4% q/q in the first quarter of 2012.

8. EUR- Eurozone Manufacturing and Services PMI- Purchasing Managers Indexes, two leading indicators of economic conditions measuring activity in the manufacturing and services sectors, Thursday, June 21, 4:00 am, ET.

More signs of a slowdown in the eurozone could come with the consensus forecasts pointing to another month of contraction in the manufacturing and services sectors. The preliminary estimate is expected to show the manufacturing index declining to 44.9 in June from 45.1in May, while the services index also inches lower to 46.5 from 46.7.

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, Thursday, June 21, 10:00 am, ET.    

In line with the trend of U.S. economic slowdown in recent months, sales of previously-owned homes are forecast to decline to 4.59 million in May compared with 4.62 million in May.  

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

Just as the ZEW survey, the German IFO index is forecast to head lower with a reading of 105.8 in June compared with 106.9 in May.

Editor's Note: For a more comprehensive look at scheduled market-moving events this coming week see Investing.com' weekly Economic Calendar.