This week promises a full slate of economic data releases on both sides of the border.

RBC Financial group says that, in Canada, markets will be focused on car sales on Monday, followed by the manufacturing survey on Tuesday and merchandise trade on Wednesday. Bank of Canada governor David Dodge also speaks on Wednesday. The week finishes off with the release of consumer prices and wholesale trade on Friday.

“July could prove to be a solid month for manufacturers and wholesalers if our expectations for shipments and exports come to fruition,” suggests CIBC World Markets. “What we know at this point is that factories have been hiring, so presumably the output figures will show commensurate gains.”

TD Bank predicts that there will be considerable interest in this week’s Canadian manufacturer’s shipments and international trade data, to see if the previous month’s softness in U.S. markets continued to affect these activities. But, it says the bigger event should be Dodge’s speech on Wednesday. “Specifically, the interest will be in how he might explain the Bank decision on September 4 to hold interest rates steady in the face of the data release on September 6 that employment was up by 59,000 in August and the release on September 10 that August housing starts totalled an annualized 213,000 units.”

Regarding inflation, CIBC notes, “The CPI is on the verge of an uptrend over the balance of the year, particularly in headline prices, as comparisons are made against the very low energy prices that prevailed in the last months of 2001 and early into 2002. However, the Bank of Canada was well aware of that prospect when it took a pass on a rate hike in September.”

BMO Nesbitt Burns notes that Canadian CPI releases have consistently landed on the high side of expectations in 2002. And, it says that Bank won’t be on the sidelines for long. “The August inflation rate is expected to rise to 2.3% from 2.1% in the prior month, led by renewed upward pressure on gasoline prices. Core inflation could also nudge up a bit to 2.2% from 2.1% in both of the two previous months. Combined with the latest batch of robust economic data, this could be all the ammunition the Bank of Canada needs to decide to hike rates again on October 16.”

In the U.S., RBC predicts that markets will be focused on business inventories on Monday, industrial production on Tuesday, consumer prices and trade on Wednesday and finishing off with housing starts and the Philly fed index on Thursday.

CIBC says that while there is a host of economic news on the docket, “it’s hard to see any of the releases generating much in the way of market reaction. A tame reading on CPI, a healthy level for housing starts, and a cavernous gap between U.S. imports and exports — it all has a very familiar ring to it.”

TD says that the U.S. data will provide an update on current market conditions. “All are expected to repeat recent patterns, confirming that this is a ‘grind it out’ recovery although housing is expected to have remained strong. The release of the Consumer Price Index for August is expected to confirm that the Fed should have no near-term worries about inflation.”

BMO says, “It’s possible that this week’s numbers will be more on the upside for August and September, making it clear that the U.S. has more economic momentum than many countries, although clearly not as much as Canada. Industrial production will probably mark time in August with only a small increase. However, housing sector reports due this week should be upbeat. This, on top of vigorous consumer spending, will highlight the substantial pockets of strength supporting growth.”

BMO suggests that the Philly Fed survey could be the most important release of the week. “That survey is very timely data and often creates a visible market reaction. Stay tuned for this on Thursday after we get another dose of new unemployment claims figures. One thing remains clear: The U.S. is in cost-cutting mode with little likelihood that layoffs will abate soon.”

CIBC says that the most important figure could be Thursday’s jobless benefit claims report. “If it stays anywhere near its last report, it will bring with it dire predictions for the next non-farm payrolls report.” But it also allows that, “Eyes won’t drift too far from the Iraq front, as the U.S. continues to make its case for military action, a prospect that seems to be putting a damper on equities right now.”