Sep. 17, 2012 (Allthingsforex.com) – Following a couple of busy weeks that have delivered unprecedented open-ended easing commitments by the Fed and the European Central Bank, the week ahead will provide an opportunity to gauge conditions on both sides of the Atlantic as traders focus on notable housing and economic activity reports from the U.S. and the euro-area.

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.    GBP- U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, Tues., Sep. 18, 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 pulling back to 2.5% y/y in August from 2.6% y/y in July. Lower inflation would not be an obstacle to additional easing by the Bank of England.

2.    EUR- Euro-zone ZEW Economic Sentiment Index, a leading indicator of economic conditions measuring the outlook of financial experts, Tues., Sep. 18, 5:00 am, ET.

The ZEW institute survey is expected to show some improvement in economic outlook with a reading of -16.3 in September compared with -21.2 in the previous month.

3.    JPY- Bank of Japan Monetary Policy Announcement, Wed., Sep. 19, around 12:00 am, ET.

In the aftermath of the “shock and awe” FOMC decision to ease policy indefinitely, the Bank of Japan is a very likely candidate to follow the Fed’s footsteps with another round of quantitative easing. Such expectations should weigh on the Japanese yen. With the economic recovery stalling and with the yen persistently strong, it would not be surprising to see the Japanese central bank hinting a potential intervention in the near future if the “one-sided moves” in the yen continue.

4.    GBP- Bank of England Meeting Minutes, a detailed report of the bank’s latest meeting containing an outlook on economic policy and economic conditions, Wed., Sep. 19, 4:30 am, ET.

There was no need for the Bank of England to change monetary policy at their September meeting and the minutes would probably confirm that view. On the other hand, the report would also serve as a reminder that the Monetary Policy Committee is standing ready to expand the size of its Asset Purchases Program if economic conditions deteriorate. The GBP could see pressures mounting if the minutes reveal willingness by the Bank of England to cut rates to supplement its quantitative easing efforts.

5.    USD- U.S. Housing Starts, a leading indicator of housing market activity measuring construction of new residential properties, Wed., Sep. 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 770K in August from 750K in July.

6.    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, Wed., Sep. 19, 10:00 am, ET.

Although still far from claiming recovery, sales of previously-owned homes are forecast to increase to 4.55 million in August compared with 4.47 million in July.

7.     JPY- Japan Trade Balance of the difference between imports and exports, Wed., Sep. 19, 7:50 pm, ET.

The alarming trend of rising trade deficit is forecast to continue to threaten the Japanese economy with the deficit widening to 809 billion yen in August from 517 billion in the previous month.

8.    EUR- Spain 10-year Bond Auction, Thurs., Sep. 20, around 2:00 am, ET.

Traders will keep an eye on the Spanish government’s sale of its benchmark 10-year bonds in order to find out if investors will demand higher premiums to hold the debt of the troubled nation. Premiums have fallen from record highs, but despite of the improvement in investor sentiment, Spanish 10-year yields climbed back above 6% last week as the government in Spain remains reluctant to ask for financial assistance. Will the market force politicians to take action? Rising borrowing costs and weak demand could put the brakes on the recent euro rally.

9.    EUR- Euro-zone Manufacturing and Services PMI- Purchasing Managers Indexes, two leading indicators of economic conditions measuring activity in the manufacturing and services sectors, Thurs., Sep. 20, 4:00 am, ET.

Despite of the forecasts for a slight improvement, both gauges are expected to spend another month in contraction territory with the manufacturing index at 45.4 in September from 45.1in August and the services index at 47.4 from 47.2 in the previous month.

10.     USD- U.S. Jobless Claims, an important gauge of labor market conditions measuring first-time claims for unemployment benefits, Thurs., Sep. 20, 8:30 am, ET.

After last week’s unexpected spike to 382K, the jobless claims are forecast to pull back to 373K. Only a consistent trend of strength in the U.S. labor market would be able to convince the Fed to halt its plans for unlimited quantitative easing.