Jobs reports on both sides of the border will be the economic highlights of the coming week. But Iraq will continue to dominate the market’s attention as earnings reports begins to thin out.

“In the U.S., a much lighter week for earnings reports will see the market’s eyes drift to economic and political news,” says CIBC World Markets. “Chances are that Colin Powell will give a strong performance at the Security Council, and in the public forum, in laying out the evidence against Iraq. But if markets are in line with U.S. opinion polls, the mere setting of Wednesday’s presentation date already has investors assuming that Americans, and enough allies for political cover, will be onboard with Bush after this week. If so, the market may have already done most of the adjustment to the war risks ahead.”

In Canada, the first quarter business-conditions survey is due out on Tuesday, Thursday will bring building permit data and the Help Wanted index. Friday is jobs report day.

“After posting a record net job creation total of 560,000 in 2002, the question is what can Canadian payrolls do for an encore?,” asks BMO Nesbitt Burns. January employment is expected to report a medium-sized increase of 25,000. “However, as humbling for economists as this fact may be,” says BMO, “the consensus under-estimated the strength of Canadian employment in each and every month of 2002, so a high-side surprise would really be no surprise at all.” The jobless rate is projected to slip a notch to 7.4% in January.

“In Canada,” says CIBC, “employment has outpaced GDP growth for the last several months, so once again, we’re expecting a much softer gain in employment. We say once again, because we have been looking in vain for a similar adjustment over the past year.”

In the U.S., the ISM manufacturing index is out on Monday, factory orders
data is released Tuesday, and non-farm productivity is out on Thursday.

Friday is also jobs report day in the U.S. “The economy is slated for what we see as a temporary, inventory-led rebound in growth in the first quarter, and next week’s data will reflect that. Look for purchasing managers to sustain their
December optimism, while employment rebounds from two month1s of decline,” says CIBC.

BMO agrees. “We look for the flow of statistics to show better economic performance. We also expect the markets to largely ignore this ahead of the onset of the anticipated war in Iraq.” Still, it says that the ISM index is likely to show growth, and it is looking for 100,000 gain in payrolls.

On the earnings front, CAE reports on Monday, along with Quebecor World.

Tuesday brings Cara Operations, Computer Sciences, Inco, and Manulife
Financial.

Agrium is out on Wednesday, as are ATS Automation, Canada Life, Falconbridge, and Inmet.

Axcan Pharmaceuticals, EDS, Gannett, Husky Energy, Potash Corp., Van Houtte Inc. and Vincor International Inc. are due on Thursday.

Friday will bring Cameco, Dofasco, Emera and Loblaw Cos.