In more data, markets will receive euro-zone manufacturing PMI, PPI and retail sales. In the UK, markets will receive August's PMI report and BOE mortgage approvals data.

Richard McGuire, fixed income strategist from RBC Capital Markets, said the interest rate decisions themselves won't be market moving, but that the ECB growth and inflation projections could have some impact.

McGuire said he is expecting the growth forecasts to be downgraded for this year and 2009, but added that markets will be looking at the mid-term inflation expectations.

"The outlook for 2009 numbers looks uncertain because oil has come off quite rapidly," he said

McGuire pointed out that even if European growth is projected to be weak, the ECB will still likely maintain its hawkish stance and won't signal interest rate cuts any time soon.

"The recent slew of hawkish rhetoric from the ECB leaves us with little doubt that [ECB President Jean-Claude] Trichet will ere on the hawkish side during the presentation," he said. "I don't think he will be hinting at higher rates but I think will be challenge expectations for easing anytime soon."

Turning to the UK, McGuire said he is not expecting the BOE to cut rates at the September meeting, which would leave markets will little direction for future monetary policy moves. But RBC forecasts that weakening growth will force the BOE to cut rates in November.

"We may be slightly optimistic for the timing with inflation near the 5.0% market," he said. "But we think the growth outlook will be sufficiently weaker at that stage."

Mark Frey, Vice-President of Custom House, said next week's data will continue to affect the euro and the pound. Although the EUR/GBP has reached decade lows, Frey said it is hard to be optimistic about either currency.

"I think both economies don't look very strong at this point," he said.

Between the two currencies, Frey said he thinks the euro will continue to be the leader, but that both will lose out to the U.S. dollar. "I think the pound and the euro have further to fall against the U.S. dollar but I think it will be an orderly decline," he said. "I don't think we will continue to see sharp declines."

Frey said he is expecting the EUR/USD to reach a bottom of 1.40 USD and the pound/U.S. dollar to reach a low of 1.79-1.78 USD.

Looking at more European data, analysts from Citigroup expect final PMI numbers to be revised down, pointing to decelerating growth.

"We expect a significant downward revision of the final PMI amid the already reported large gains in Germany and France," they wrote in a research report. "Hence, the final August manufacturing PMI is likely to fall by 0.8 points M/M rather than edging up by 0.1 points M/M as the flash estimate suggested."

Citigroup also wrote in their notes that they don't expect a lot of good news for European retail sales. "We expect a second consecutive fall in retail sales in July. The retail PMI and other confidence indicators suggest that the contraction in retail sales continues," they wrote.

All times in EDT.

Monday: It's a big start to the week with a flurry of data from the UK and Europe. In the euro zone, markets will receive the European final PMI, which is expected remain unchanged at 47.5.

In the UK, PMI manufacturing for August is projected to decline to a reading of 44.0 following July's level of 44.3.

Also, BOE mortgage approvals for July are expected to decline to 35,000, down from June's 36,000 figure.

2:00 DE Retail Sales (M/M) July Exp: -0.3% Prior: -1.4%

2:00 DE Retail Sales (Y/Y) July Exp: -2.2% Prior: -3.9%

3:45 IT PMI Manufacturing August Exp: 46.5 Prior: 45.3

3:50 FR PMI Manufacturing August Final Exp: 45.1 Prior: 45.1

3:55 DE PMI Manufacturing August Final Exp: 49.9 Prior: 49.9

4:00 IT Large Company Employment (NSA) (Y/Y) June Prior: -0.1%

4:00 EU PMI Manufacturing August Final Exp: 47.5 Prior: 47.5

4:30 GB M4 Money Supply (M/M) July Final Prior: +0.9%

4:30 GB M4 Money Supply (Y/Y) July Final Prior: +11.2%

4:30 GB M4 Sterling Lending (BP) July Final Prior: 14.3B

4:30 GB Net Consumer Credit July Exp: 0.8B Prior: 0.9B

4:30 GB Net Lending Sec. on Dwellings July Exp: 3.0B Prior: 3.1B

4:30 GB Mortgage Approvals July Exp: 35K Prior: 36K

4:30 GB PMI Manufacturing August Exp: 44.0 Prior: 44.3

5:00 IT Hourly Wages (M/M) July Exp: +0.2% Prior: +0.3%

5:00 IT Hourly Wages (Y/Y) July Exp: +3.7% Prior: +3.6%

5:15 EU ECB's Tumpel-Gugerell Speaks in Belgrade

8:30 EU ECB's Papademos Speaks in Buenos Aires

12:00 IT New Car Registrations (Y/Y) August Prior: -10.9%

13:00 IT Budget Balance August Prior: 2.2B

13:00 IT Budget Balance (Year to date) August Prior: -21.1B

September 1-5 GB HBOS House Price 3Mths/Year August Exp: -10.7% Prior: -8.8%

September 1-5 GB HBOS Plc house prices (SA) (M/M) August Exp: -1.8% Prior: -1.7%

Tuesday: Markets will pay attention to European PPI, which is expected to show an annualized rise of 9.1%, following June's 8.0% increase. The monthly rate is expected to increase 1.3% following the previous month's increase of 0.9%.

4:30 GB PMI Construction August Exp: 36.0 Prior: 36.7

5:00 EU Euro-Zone PPI (M/M) July Exp: +1.2% Prior: +0.9%

5:00 EU Euro-Zone PPI (Y/Y) July Exp: +9.1% Prior: +8.0%

19:01 GB Nationwide Consumer Confidence August Exp: 49 Prior: 51

September 1-5 GB HBOS House Price 3Mths/Year August Exp: -10.7% Prior: -8.8%

September 1-5 GB HBOS Plc house prices (SA) (M/M) August Exp: -1.8% Prior: -1.7%

Wednesday: It's another big day for European markets with the release of second-quarter euro zone GDP, which is expected to fall 0.2% following the previous quarter's 0.2% decline. Annualized GDP is expected to increase by 1.5% following a previous rise of 1.5%.

European annualized retail sales for July are expected to remain weak with a decline of 2.1% following the previous decline of 3.1%.

3:30 IT Business Confidence August Exp: 84.0 Prior: 83.5

3:45 IT PMI Services August Exp: 46.5 Prior: 45.6

3:50 FR PMI Services August Final Exp: 48.5 Prior: 48.5

3:55 DE PMI Services August Final Exp: 50.6 Prior: 50.6

4:00 FR Bank of France's Landau Speaks in Paris

4:00 EU PMI Services August Final Exp: 48.2 Prior: 48.2

4:00 EU PMI Composite August Final Exp: 48 Prior: 48

4:30 GB PMI Services August Exp: 47.0 Prior: 47.4

4:30 GB Official Reserves (Changes) August -$60M

5:00 EU Euro-Zone Retail Sales (M/M) July Exp: +0.1% Prior: -0.6%

5:00 EU Euro-Zone GDP (Q/Q) (SA) 2Q Preliminary Exp: -0.2% Prior: -0.2%

5:00 EU Euro-Zone GDP (Y/Y) (SA) 2Q Preliminary Exp: +1.5% Prior: +1.5%

5:00 EU Euro-Zone Retail Sales (Y/Y) July Exp: -2.1% Prior: -3.1%

5:00 EU Euro-Zone Gross Fix Cap (Q/Q) 2Q P Exp: -0.6% Prior: +1.6%

5:00 EU Euro-Zone Government Expend (Q/Q) 2Q P Exp: +0.4% Prior: +0.4%

5:00 EU Euro-Zone Household Cons (Q/Q) 2Q P Exp: -0.1% Prior: +0.2%

5:30 GB BRC August Shop Price Index

9:30 EU ECB's Tumpel-Gugerell Speaks in Limelette, Belgium

September 3-4 EU ECB's Liikanen, EU's Almunia at GES Forum, Schleswig

September 3 EU EU's Almunia Attends Panel at Global Economic Symposium

September 1-5 GB HBOS House Price 3Mths/Year August Exp: -10.7% Prior: -8.8%

September 1-5 GB HBOS Plc house prices (SA) (M/M) August Exp: -1.8% Prior: -1.7%

Thursday: It's all about the central banks. Markets expect both the ECB and BOE to hold rates steady at 4.25% and 5.00%, respectively. Following the ECB announcement, markets will be interested to hear what ECB President Jean-Claude Trichet has to say at the monthly press conference.

2:45 FR ILO Unemployment Rate 2Q Exp: 7.5% Prior: 7.5%

2:45 FR ILO Mainland Unemployment Rate 2Q Exp: 7.2% Prior: 7.2%

2:45 FR Mainland Unemployment Change (000s) 2Q Exp: -13K Prior: -77K

3:30 SE Riksbank will announce interest rates Prior: 4.50%

3:30 IT Retailers' Confidence General August Prior: 98.4

3:30 IT Services Survey August Prior: -8

6:00 DE Factory Orders (M/M) ((SA)) July Exp: +0.3% Prior: -2.9%

6:00 DE Factory Orders (Y/Y) ((NSA)) July Exp: -2.2% Prior: -6.1%

7:00 GB Bank of England Interest Rate Decision Exp: 5.00% Prior: 5.00%

7:45 EU ECB Announces Interest Rates Exp: 4.25% Prior: 4.25%

8:30 EU ECB's Trichet to Speak at monthly press conference

September 1-5 GB HBOS House Price 3Mths/Year August Exp: -10.7% Prior: -8.8%

September 1-5 GB HBOS Plc house prices (SA) (M/M) August Exp: -1.8% Prior: -1.7%

Friday: The week ends with German industrial production, which is projected to fall 0.4% in July following a previous rise of 0.2%. The day is also full of ECB speakers with President Jean-Claude Trichet and executive board members Jurgen Stark and Lorenzo Bini Smaghi speaking at an event in Frankfurt, Germany. ECB executive board member Gertude Tumpel-Gugerell will also speak at an event in San Sebastian, Spain.

Friday is also a big day for the new ECB member and President of the Austrian central bank Ewald Nowotny. He will speak at his first press conference in Vienna, Austria.

2:45 FR Central Govt. Balance July Exp: €-33.4BPrior: €-32.8B

2:50 DE ECB's Trichet, Stark, Bini Smaghi Speak in Frankfurt

4:00 IT Trade Balance (Total) (Euros) June Exp: €-1000M Prior: -59.0M

4:00 IT Trade Balance Eu (Euros) June Prior: €1713.0M

4:00 EU ECB's Ewald Nowotny holds opening press conference in Vienna

6:00 DE Industrial Production (Y/Y) (NSA) (WDA) July Exp: +0.8% Prior: +1.7%

6:00 DE Industrial Production (M/M) (SA) July Exp: -0.5% Prior: +0.2%

6:30 EU ECB's Gonzalez-Paramo Speaks in San Sebastian

September 1-5 GB HBOS House Price 3Mths/Year August Exp: -10.7% Prior: -8.8%

September 1-5 GB HBOS Plc house prices (SA) (M/M) August Exp: -1.8% Prior: -1.7%

By Neils Christensen, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Stephen Huebl, This email address is being protected from spam bots, you need Javascript enabled to view it

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