The consensus among economists at the major financial firms is that the Bank of Canada is going to raise rates by 25 basis points next Tuesday. The rate decision will be the week’s key event. “There’s little doubt that the Bank of Canada will raise rates again this week, and we favour a quarter-point move consistent with Dodge’s gradual approach, particularly with U.S. rates still at 1.75%,” say the economists at CIBC World Markets.

“While talk of possible 50 bps hikes is swirling, the Bank will likely hold off on more aggressive steps until the Fed starts to raise rates,” says BMO Nesbitt Burns. TD Bank has suggested a possible 50 bps hike could occur. But TD also says U.S. Federal Reserve hikes are not likely to begin until August.

TD Economics is forecasting another100 basis points of central bank tightening by the end of the year, and an additional 125 basis points in the first half of next year, “which should be sufficient to bring monetary conditions in Canada to a neutral stance.”

Other than the rate decision, building permit data will be released on Tuesday morning. Then on Thursday, help-wanted index numbers are due out.

Friday will be the other big day, with jobs reports coming out on both sides of the border. “Friday’s employment report won1t cast doubt on the wisdom of another rate hike, but after so much hiring in Q1, and only a modest out-performance vs. the U.S. in output, the unemployment rate will likely take a pause at 7.6% rather than continue to head lower,” says CIBC.

BMO says, “Canadian employment has been on an absolute roll since the start of the year, not just topping expectations but destroying them.” BMO economists are suggesting that these gains are unsustainable, and are looking for a cooling in job growth to around 15,000, and no change in the jobless rate.

“In the U.S., an employment turnaround will be key to the timing of the first Fed rate hike,” say CIBC economists. “But a middling payrolls report won’t provide enough steam to push the central bank off its watch-and-wait stance.”

Leading employment indicators in the U.S. range from tepid to very weak, says BMO. “We are especially concerned about the rise in the number of persons receiving unemployment benefits and anecdotal news that college students are having trouble finding jobs. The small business survey shows weak hiring plans and declining wage pressure. We expect the data to mirror that bottom line and look for a possibly material rise in the unemployment rate.”

The remaining U.S. for the week will be Monday’s manufacturing survey from the Institute for Supply Management. RBC Financial says it is likely to show that a manufacturing sector recovery is still intact but moderating. “The ISM report for the factory sector is likely going to show that the recovery continued in May,” says BMO.