With few economic releases on the schedule this week, traders will likely focus on earnings and the whisperings from central bankers on both sides of the border.

RBC Financial says that this week will be relatively quiet with the only significant releases concentrated in the early part of the week. “Car sales for February are due out on Monday, followed by an update on the consumer price index on Tuesday,” it notes. “A small rebound in car sales that have been sagging for since last summer is expected, while inflation is expected to remain sharply subdued in Canada.”

BMO Nesbitt Burns says that inflation is in the process of bottoming out in Canada, “and March is expected to display roughly the same low, low year-over-year results as February, for both core and headline inflation”. It predicts that overall prices will rise 0.5% from the prior month, but notes that this would only slightly nudge up the year-over-year rate to just 0.8% from 0.7% in February.

“We don’t see March prices differing from the Bank [of Canada]’s own implicit assumptions,” says CIBC World Markets. “While not a top-tier release, resurgent auto sales data will signal solid consumer spending in February. But without US-style tax relief, it will hard for consumers to remain in high gear now that the labour market is bleeding jobs.”

Also, Bank of Canada governor David Dodge will appear before Parliament on Tuesday and Wednesday, and he’s speaking at York University on Thursday. “Having cut rates and rolled out a shiny new policy report, Governor Dodge will now take his message to Parliament Hill,” notes CIBC. “Don’t expect any deviation from a cautiously optimistic outlook, and ‘balanced ‘risk assessment’ in appearances before the House and Senate.”

U.S. economic calendar

In the U.S., the only data out this week is the Beige Book on Wednesday, initial unemployment claims on Thursday, and durables goods orders on Friday. But, central bankers will take centre stage there, too. CIBC says that on Tuesday and Wednesday traders will be focused on congressional testimony from Fed Chairman Greenspan. “Richmond President Broaddus appeared to play down the chances for a pre-election hike, and bonds could benefit in the likely event Greenspan also suggests the Fed is still some way from retightening.”

BMO Nesbitt Burns says that Wednesday’s testimony before the Joint Economic Committee on the U.S. economic outlook, might be “the perfect venue to respond directly to the cacophony of if the Fed’s behind the curve calls.”

“The market is pricing-in not only eventual Fed tightening, but higher inflation expectations and rising inflation risk. Whether the up-shifting yield curve continues to steepen, or provides some flattening relief, will likely hinge on Mr. Greenspan’s bon mots,” Nesbitt says. “The JEC session has been used by the Chairman in the past to provide policy nuances. Is the Fed’s thinking that the risk of deflation was still slightly greater than the risk of inflation turning to even odds? The bond market waits for an answer.”

Corporate earnings

Nesbitt says that this week will be the busiest week for corporate earnings releases. So far, just over 20% of S&P 500 companies have reported, it says. And, this will jump to over 55% by the end of next week when approximately 35% of S&P 500 companies release results.

“The Dow will also have its busiest week, with 14 companies due to report, bringing the total to 20. 3M kicks off the week with its results on Monday morning. Altria Group, General Motors and Pfizer report Tuesday, followed by Coca-Cola, Honeywell, JP Morgan Chase, SBC Communications and United Technologies on Wednesday,” it notes. “And on Thursday, we get results from American Express, AIG, Caterpillar, Merck and Microsoft.

In addition, the three ex-Dow companies report during the week. Eastman Kodak, AT&T and International Papers report on Wednesday, Thursday and Friday, respectively.”

In Canada, CHUM reports on Monday. Cott Corp., Forest Laboratories, Husky Energy Inc. and Teknion Corp. report on Tuesday.

Wednesday brings out CanWest Global Communications Corp., Goldcorp Inc., Imperial Oil Limited, Methanex Corp., Inco and NOVA Chemicals Corp..

On Thursday the market will hear from Barrick Gold, Astral Media Inc., Cameco Corp., Corus Entertainment Inc., Celestica Inc., Canadian National Railway Co., Davis + Henderson Income Fund, Nexfor Inc., Potash Corp. of Saskatchewan, Sears Canada Inc., Shell Canada, Sierra Wireless, TransAlta Corp. and Terasen Inc.