Top 10 Forex Events Outlook: June 25-29, 2012

In the aftermath of the Fed’s decision to offer additional monetary policy easing, all eyes will turn to the EU Summit on June 28-29 in anticipation of the promise by EU leaders for new bold solutions to fight the debt crisis.

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. USD- U.S. New Home Sales, an important gauge of housing market conditions measuring sales of new homes, Monday, June 25, 10:00 am, ET.

Following the weaker existing home sales and housing starts data, sales of new homes in the U.S. are forecast to register a slight increase to 345K in May from 343K in April.

2. USD- U.S. Consumer Confidence, a measure of consumers’ outlook on the economy, Tuesday, June 26, 10:00 am, ET.

Deteriorating labor market conditions would be likely to lead to a gloomier outlook pushing the consumer confidence index lower to a reading of 64.0 in June compared with 64.9 in the previous month.

3. USD- U.S. Durable Goods Orders, a gauge of industrial activity measuring orders for durable goods placed with domestic manufacturers, Wednesday, June 27, 8:30 am, ET.

Orders for durable goods in the U.S. are forecast to bounce higher by 0.4% m/m in May after staying flat at 0% m/m in April.

4. USD- U.S. Pending Home Sales, a leading indicator of housing market activity measuring pending home sale contracts, Wednesday, June 27, 10:00 am, ET.

The larger-than-expected drop by 5.5% m/m of the pending home sales index in April is expected to be followed by an increase by 1.1% m/m in May, but still short of instilling much confidence in the state of the U.S. housing market.

5. EUR- EU Summit, Thursday, June 28 and Friday, June 29, all day events.

Not exactly a surprise given the history of the last couple of years, the previous EU Summit failed to bring any solutions to the escalating debt crisis and only added to the uncertainty. The French President Francois Hollande proposed the creation of eurobonds. His call gained the support from most member states of the eurozone with the exception of the one that matters the most - Germany, as well as the Netherlands.

In line with the current trend, at their previous meeting EU leaders promised more solutions to come at the next summit. The main EU institutions were given the task to draft “proposals for closer fiscal coordination, including plans for a Europe-wide deposit guarantee scheme.” The draft due date is the upcoming EU Summit on June 28-29. Should we witness the usual set of newly-proposed ideas but no agreement on fiscal unification, and a potential political deadlock, with German-supported austerity and French spending policies at odds with each other, we remain doubtful that the new EU Summit will be able to convince the markets that the worst of the debt crisis is behind.

The danger for the euro is that after three years of promises, it might not be too much longer before investors run out of patience with EU leaders who seem content to kick the can down the road and have shown their inability to effectively deal with the crisis. Can they prove us wrong this time around? We cannot help but to approach this summit with a healthy dose of skepticism.

6. GBP- U.K. GDP- Gross Domestic Product, the main measure of economic activity and growth, Thursday, June 28, 4:30 am, ET.

The final reading of the U.K. GDP is forecast to confirm that the economy registered its first double dip recession in thirty years, contracting by 0.3% q/q in the first quarter of 2012, following the 0.3% q/q contraction in Q4 2011. Although already priced in, the report would serve as a reminder of the U.K. economic weakness and could weigh on the GBP on expectations that the Bank of England might have no other choice but to expand its Asset Purchase Program.

7. USD- U.S. GDP- Gross Domestic Product, the main measure of economic activity and growth in the world’s largest economy, Thursday, June 28, 8:30 am, ET.

Last month, the GDP report joined the list of weak U.S. economic data with a downward revision from the preliminary estimate of 2.2% q/a to 1.9% q/a in the first quarter of 2012. The final reading is not expected to bring any changes with the economy forecast to grow at a slower pace by 1.9% q/a in Q1 2012 compared with 3.0% in the fourth quarter of 2011. If there should be another revision lower, it would not be surprising to see the pressure mounting on the U.S. dollar on signs of U.S. economic slowdown and rising QE3 odds.

8. JPY- Japan CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of Japan, Thursday, June 28, 7:30 pm, ET.

After rising a bit for a few months, the nationwide Core CPI (excluding food and energy costs) is forecast to flatten with a reading of 0.0% y/y in May, compared with the 0.2% y/y increase in the previous month. Deflation could rear its ugly head and could prompt the Japanese central bank into additional easing if the index drops below zero and into deflation territory in the months ahead.

9. EUR- Italy 10-year Bond Auction, Friday, June 29, around 2:00 am, ET.

As the second day of the EU Summit gets underway, the Italian Treasury plans to sell 10-year government bonds. The outcome of the bond auction will be a great gauge of market sentiment. A rise in Italian borrowing costs could be perceived as a vote of no confidence by investors in the EU leaders’ ability to contain the debt crisis which has engulfed Spain, the number four economy in the euro-area, and threatens Italy, the third-largest economy in the eurozone.

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, Friday, June 29, 9:55 am, ET.

The report will wrap up what is shaping up as yet another week of unimpressive U.S. economic data that could add more reasons for the market to expect additional easing by the Fed as early as their next meeting on July 31-August 1. The outlook of U.S. consumers in June could see a slight upward revision with an index reading of 74.3 compared with the preliminary estimate of 74.1, remaining at a six-month low.

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