(February 12 – 07:20 ET) – A heavy slate of economic data is due this week. It should provide investors and traders with some direction.

The biggest newsmaker of the week could be U.S. Federal Reserve Board chairman, Alan Greenspan, who is speaking before the U.S. Senate banking committee on Tuesday. “Market participants want to get a reading on his view of the seriousness of the decline in factory production and on the probability that manufacturing weakness is spreading to other sectors,” say the analysts at BMO Nesbitt Burns.

“If the chairman focuses on the possibility of deep declines in capital spending, or sees a breach of consumer confidence, markets will conclude that further substantial Fed rate cuts are in the offing,” says BMO.

CIBC World Markets analysts aren’t expecting to get too much insight from Greenspan’s tesimony, noting that he’ll need more data before signalling the Fed’s move.

U.S. retail trade numbers are due out Tuesday morning. Economists are looking for a 0.5% increase, but that expectation is based on widespread retail discounting, not an improvement in consumer confidence.

Markets will get Wednesday to digest the news. Then on Thursday, Canadian inflation numbers are due. Economists are warning that inflation will be jumping again, and expect a 2.2% core rate reading, moving inflation into the upper half of the Bank of Canada’s tolerance for the first time in three years.

“But the news should get better from here,” says BMO. “Like the Bank, we see the headline and underlying rates gradually converging near 2% in the latter half of the year. With policymakers rightly downplaying inflation risks, mounting evidence of economic weakness could justify more aggressive monetary easing come March 6th.”

CIBC agrees. “Our forecast sees this as the likely peak in core CPI, and not an impediment to more aggressive interest rate cuts as growth falters in Q1.” Merrill Lynch is calling for a 50 basis point cut at the next meeting, with today’s soft employment report clearing the way for that move.

On Friday, the U.S. will be besieged with data releases including producer inflation, industrial production and capacity utilization numbers, and housing starts. The core PPI is expected to remain flat. Production is expected to drop as productivity weakens

On the earnings front, a couple of financial stocks are expected to report, along with a slew of old economy names. Intrawest and Trizec Hahn are the big names reporting on Monday. Tuesday will bring Industrial-Alliance Life, Rogers Communications, Teknion Corporation and Pacifica Papers to the stage. On Valentine’s Day, the firms hoping for sweetheart status include Placer Dome, Sun Life Financial and Telus Corp. On Thursday, TD Bank, Alliance Forest Products, BC Gas Inc., Brookfield Properties, Four Seasons and Kinross Gold will report.