There is minimal economic data due out in Canada the coming week, but traders are looking ahead to the highly anticipated decision on interest rates by the Bank of Canada.

In the U.S., there’s plenty of data on the schedule, which will be capped off by the highly-anticipated employment report for February on Friday.

RBC Financial says that Tuesday’s meeting of the Bank of Canada will garner the most attention. RBC says that it expects a one-quarter percentage point cut to interest rates. “The motivation for a cut would be to take out one bit of added insurance on a Canadian economic expansion,” RBC says.

Its stance is widely echoed. TD Bank says that the bottom line is that Canada’s industries are being impacted by the stronger Canadian dollar, but the fallout is being tempered by more robust U.S. and global demand, as well as by higher product prices. For the Canadian economy as a whole, it predicts that the Canadian dollar will knock about 2 percentage points off of economic growth in 2004, but that U.S. economic growth and higher commodity prices will add about 1.5 percentage points. “With this subdued economic growth outlook in mind, we continue to expect that the Bank of Canada will cut rates by 25 basis points at next week’s March 2 fixed policy announcement date. However, we’re less convinced that the monetary policy easing will continue beyond that point.”

BMO Nesbitt Burns says that there seems to be little debate about what the Bank intends to do next week. “The real debate is whether the Bank signals that it is still in easing mode. This is a little less clear cut, especially with the Canadian dollar suddenly showing signs of serious struggle. However, with inflation largely unfolding as the Bank expected, growth muddling along, and the Fed apparently on hold for some time yet, the press release is likely to leave the door open for additional rate cuts in the spring.”

CIBC World Markets says that the quarter point cut is a given, and that the key will be the accompanying verbiage. “It will by necessity capture softness in the inflation outlook, but we expect the remaining comments to be quite upbeat on growth. Dodge can’t be too downcast with a Federal Budget due within a month’s time, and an election still in the offing after that.”

The only other Canadian data out next week is industrial prices for January on Tuesday and January building permits and the Ivey purchasing managers’ index for February, both due on Thursday. Nesbitt says that the industrial prices release could be of some interest. “On balance, we look for industrial prices to rise 0.5%, which would still leave them down more than 3% from year-ago levels.”

In contrast to the light Canadian data schedule, the U.S. gets what RBC calls, “a bevy of important updates on the performance of the U.S. economy in general and the manufacturing sector in particular”.

Monday starts off with the ISM manufacturing survey for February, and personal income plus construction spending in January.

The ISM non-manufacturing survey for February and Federal Reserve’s Beige book survey of regional conditions are the biggest releases on Wednesday, followed by Janurary factory orders, Q4 productivity and costs, and weekly jobless claims on Thursday.

“Friday brings the update that markets will be watching the closest of any during the week in the form of the employment report for February with consensus expectations currently pointing to a job gain of 135,000 after the previous month’s gain of 112,000,” RBC says.

“Personal income and spending for January will start the week off by showing that U.S. consumers started the year out on the right note. February’s ISM report will then likely show a slight decline from January. However, factory activity remains on track to post gains in the months ahead, as the U.S. economic recovery gathers momentum,” CIBC says. “The services ISM is also expected to post a slight pullback, but to still show robust activity.” It adds that the Beige Book should “reinforce the view that the clouds of concern hovering over the U.S. economy are parting, but that jobs remain a challenge.”

On the payrolls side, CIBC says that even if the roles expand by 125,000, as expected, the average number of jobs added over the past six months would be just 81,800 “a number far too small to prod the Federal Reserve off the sidelines. The household survey is expected to show that the jobless rate held at 5.6%.”