With the year coming to a close trading activity may start to ebb away, but there will still be full schedule economic data release this week.

Manufacturing shipment data is out in Canada on Tuesday, followed by trade data on Wednesday. Thursday brings wholesale trade numbers, and the latest Consumer Price Index is out on Friday. BMO Nesbitt Burns warns that the Canadian inflation rate is poised to hit its highest level in 11 years in November, with the headline rate peaking at about 4%, up from 3.2% last month.

CIBC World Markets agrees that consumer inflation is set to top out at 4% in November, reflecting the temporarily low energy prices seen a year ago, and one-off hits to core prices this year. “But markets have been well warned ahead of these numbers, and the combination of electricity re-regulation in Ontario, and the dropping out of very low late 2001 levels from the 12-month change, will soon put this spike behind us.”

Nesbitt notes, “This spike has been well anticipated by forecasters and the Bank of Canada, so while it will grab plenty of headlines it will have few policy implications.”

Rather than keying on inflation, CIBC suggests, “Watch for the manufacturing and export sectors to give back some of last month’s big gains, building the case for a cooler Q4 GDP figure.”

Nesbitt predicts that a small dip in auto production and softer U.S. demand are likely to keep manufacturing shipments and exports unchanged for October. “After rising by 7.4% in the past year, shipments are poised to stall out for the next few months, as factories adjust to weaker North American auto sales. While exports are expected to be flat, imports were likely boosted by persistent strength in Canadian domestic demand, so the trade surplus is projected to slip to $4.7 billion.”

The U.S. CPI is slated for release on Tuesday. Housing starts, industrial production and capacity utilization will all be out then, too. Wednesday brings the goods and services balance numbers. The leading indicator is revealed on Thursday, with U.S. Federal Reserve Board chairman Alan Greenspan also scheduled to speak. On Friday, U.S. third quarter GDP numbers are out.

“Markets will likely be attuned to the series of trial balloons that Washington will be floating in coming days in order to test sentiment for various fiscal-policy options. Meanwhile, the economic data are not likely to break decisively out of the soft patch,” says Nesbitt.

CIBC says that, in the U.S., monthly inflation trends will remain in check. “The housing sector should continue to be a bright spot, but things still look soft in the factory sector, with only an upturn in utilities standing in the way of a further slippage in industrial production in November. Markets will also keep an eye on weekly retailing and jobless claims figures, although the latter has been rendered much less useful by some vagaries in the seasonal adjustment process. A narrowing of the US trade deficit will in part reflect lingering impediments to imports due to the backlog from a west-coast dockworkers dispute. Greenspan’s remarks to the Economic Club in New York are likely to mirror the very tentative optimism in the last FOMC decision.”

Nesbitt comments, “We will also see another terrible trade deficit reading for the U.S. and, as a companion, the budget deficit report for November is expected to make it clear that the trajectory of the U.S. budget is toward rapidly rising deficits even before additional stimulus is applied.”

Finally, the earnings slate remains light, with a few tech firms reporting this week. Cognos is due to report its results on Thursday, along with Research In Motion, Jabil Circuit and Solectron.