FX Majors The Week Ahead

US - the trade deficit, retail sales, import prices, Michigan sentiment and business inventories/sales are the data features, while the Fed releases the minutes of the last meeting and the latest Beige Book (in preparation for the next meeting on October 25). It seems unlikely that the Fed releases will do much to alter current thinking on Fed policy, although any reiteration of their dissatisfaction with current core CPI rates could weigh a little further on talk of rate cuts early next year. Other than that, the market will remain focused on data relating to the extent of the current slowdown in economic activity, although oil price weakness will continue to cushion the blow of any weakness in the data. Retail sales are probably the main focal point, although Michigan sentiment will be watched to see whether there has been any further uplift as a result of low fuel prices. The trade deficit data will also interesting to see how much of last month's widening (to $68bn from $64.8bn) has been sustained.Eurozone - data features include German trade, French/German/Italian industrial output and French CPI, although none of these are likely to affect market sentiment on key issues. The ECB monthly report is also due and as is typically the case, will likely reiterate the message from Trichet at the ECB press conference - namely that there are upside risks on inflation and that further withdrawal of monetary stimulus will be likely if conditions develop in line with ECB assumptions.Japan - machinery orders are due and the market will be keen to see what sort of bounce back there is after the very sharp 16.7% m/m decline seen last month. Before this drop the series was in a solid uptrend, but if such depressed levels are sustained this would change. Given the natural volatility in this series a strong rebound seems the most likely outcome. Bank lending, current account, consumer confidence and CGPI data are also due, while the BoJ meets to discuss policy. Policy is likely to be left unchanged, although the market will be keen to see how vigorously they reiterate the case for gradual policy tightening.UK - data on PPI, BRC retail sales, the trade deficit and the British Chambers of Commerce quarterly survey are the only features. Last month's core PPI output eased back to +2.0% y/y from +2.4% and the status of this number (along with CPI and average earnings in coming weeks) will influence market sentiment about the perceived inflation threat going into the next MPC meeting. The BCC survey is a well respected and fairy comprehensive survey of business, as it takes into account both service sector and manufacturing companies, so anything notable could have some impact.Australia - a speech by RBA governor Stevens and this week's Australian data - housing finance, consumer sentiment, employment - will help to determine whether the RBA will be raising rates as soon as next month. RBA governor Stevens is likely to make it clear that while the US economy is showing signs of weakness, there is a clear risk of a further rate rise in Australia. Thus far only private sector credit has shown any meaningful response to tighter policy and even this was just one month of data. Employment has been strong in recent months, while consumer sentiment bounced back 12.5% in September after the "rate-hike prompted" 16.2% drop recorded in August.