(July 17 – 09:45 ET) – Economists are focused on the U.S. CPI and Senate banking committee testimony from Fed chair Alan Greenspan next week.
Greenspan’s testimony is slated for Thursday and this will likely dominate attention next week. No one expects him to rock the boat too much, but RBC Dominion Securities Inc. says it expects balanced testimony, leaning toward the still-hawkish tone. “Interest rate markets
should brace for a bit of a reality check,” it suggests.
BMO Nesbitt Burns Inc. is a little more sanguine, expecting Greenspan to “offer some carefully worded hints that the Fed feels it has itself ahead of the curve on the inflation fight,” although it admits, “Don’t look for him to sound the all clear on interest rates, as a 25 bps insurance hike at the Federal Open Market Committe still can’t be ruled out.”
The other big event will be the U.S. CPI on Tuesday. After today’s PPI, economists are looking for the headline rate to jump about 0.4%, with a moderate 0.1% increase in the core rate (ex food and energy). CIBC World Markets says only a big jump in the core rate would spook equity markets, with most numb to oil shock-caused headline jumps.
In Canada the docket is sparse with Wednesday’s merchandise trade report the biggest news. It’s expected that the surplus will widen a little to $3.4 billion. BMO Nesbitt doesn’t expect much reaction to the report, with Greenspan the bigger factor.
The earnings slate is extremely busy this week with many companies reporting. Among the biggest, Alcan will report today, Wednesday will bring Celestica, Stelco and Falconbridge. Imperial Oil reports on Thursday, and Rogers on Friday. The other big oils are expected to report sometime next week although the dates aren’t confirmed.
In the U.S. the reporting schedule will be heavy too with most of the major drug companies and financial institutions reporting. Microsoft is slated for Tuesday.
-IE Staff