With economists puzzling over North American central bankers’ next moves on interest rates, markets will be closely watching this week’s economic data for some clues.

In Canada, the week opens up with the release of May housing starts. April manufacturing shipments and international trade numbers come out at the end of the week. Along the way, Bank of Canada governor David Dodge will also be speaking about monetary policy in Montreal.

“A slew of largely secondary releases will do little to silent chatter over the need for a Bank of Canada rate cut,” says CIBC World Markets. “While we’re not holding our breath for a near-term u-turn in Bank thinking, declines in everything from housing starts, industrial utilization rates, auto sales, exports and manufacturing shipments would signal a further loss of Canadian economic momentum. Governor Dodge speaks again, with Thursday’s talk on “current economic developments and the conduct of monetary policy” worth a look.”

BMO Nesbitt Burns agrees that none of this week’s releases can be considered “top-tier”. “But there will be a steady diet of potentially market-moving speeches and mid-level indicators on board. Governor Dodge will speak in Montreal on Thursday and Deputy Governor Duguay speaks the next day, perhaps providing a hint if the Bank is just pausing in its tightening campaign, or has moved into neutral on the way to eventually easing,” Nesbitt says. “On the data front, there will be a couple of mop-up Q1 numbers — capacity utilization and labour productivity — and some figures for April, which will give an update on how the muscle-bound loonie is impacting trade and manufacturing.”

Nesbitt says that it is looking for a significant weakening of both manufacturing shipments and exports in April, as producer prices tumbled in the month, employment fell, and auto production slipped. “These reports are likely to represent a string of miserable data for April, pointing to meagre-to-no GDP growth for all of Q2, and possibly ramping up talk that the next move by the Bank will be to ease. However, an expected turnaround in second-half U.S. growth should dampen that chatter.”

In the U.S., inflation is the watchword, with economists suggesting that any signs of negative inflation will prompt more rate cuts from the Federal Reserve Board by the end of the month. On that count, producer inflation numbers are out on Friday, with consumer numbers coming the following week. Also, RBC notes that April wholesale sales are released on Monday, and “the more important” international trade figures and consumer confidence numbers for May come out at the end of the week.

Also, Fed chairman Greenspan is talking on Tuesday, the Beige Book is out on Wednesday, and May retail sales are reported on Thursday.

“Although the market has fully (and in our view rightly) priced in a quarter-point cut at the next FOMC, the Fed’s Beige Book will provide a current read on their thinking as June 25 approaches,” CIBC observes. “Data wise, the week ahead’s numbers should build the case for imminent rate relief.”

“Dashing hopes of a post-war spending spree, retreating May retail results (although partly driven by plunging gasoline prices) would highlight a consumer sector with little growth momentum. Elsewhere, another tame core PPI reading would keep producer price disinflation alive on a year-over-year basis,” notes CIBC.

Nesbitt says that, “In the coming week, PPI is likely to show no further deflation pressure in May, retail sales were so-so, the April trade gap was routinely horrendous, and consumer confidence was rising, as per usual. In this atmosphere, the Fed is in the market for insurance, which we know because they keep telling us so. Thus, having been clearly instructed about the bottom line, we regard middle-of-the-road data as conclusive proof that they intend to ease. The economy is as guilty of downside risk as Martha is of insider trading, at least until proven innocent. Surely, a large rise in hiring of temporary workers, which was all that saved the May figures from being weaker than expected, will not stay the Fed’s hand.”

The earnings schedule is light this week, with CHC Helicopter Corporation reporting on Monday, and Agricore and Transcontinental Group Inc. due on Wednesday.