Next week leads off with two big events; Canada’s first federal budget in two years, and this year’s final Fed decision.

The Liberals bring down their first budget in two years on Monday and it is expected to focus on new security spending, with minimal room for fiscal stimulus or new investment. “The lack of a US-style stimulus package should point to more pressure for Bank of Canada rate cutting ahead, a plus for the front end of the yield curve but negative for the Canadian dollar,” says CIBC World Markets.

The budget is not expected to be a blockbuster. Canadian housing starts are also reported on Monday morning and Tuesday morning brings Canada’s only other data of the week, capacity utilization. BMO Nesbitt Burns says the homebuilding industry has been a major bright spot this year, but notes that starts are expected to slip in November to a 158,000 pace, in line with the 12-month trend.

The rest of the week will bring the focus back to the U.S. Tuesday afternoon should see a rate cut from the U.S. Federal Reserve Board. “It’s no time for the Fed to disappoint markets, not when the economy is still on such shaky ground,” says CIBC World Markets, noting that the futures market has priced in only a 25 basis point cut. “A quarter-point cut, and maintaining the downward bias on growth, might mark the end of the easing cycle if Congress delivers a timely and substantial spending and tax cut package.”

After the Fed decision, there’s a steady flow of data in the U.S., although it likely won’t have much impact with the Fed meeting for the last time this year. On Wednesday, the current account balance is reported and Thursday brings retail trade and producer price data. On Friday, the U.S. Consumer Price Index is reported, along with industrial production and capacity utilization numbers. BMO Nesbitt Burns predicts a further 0.3% fall in the PPI, and says the CPI will likely decline for the second month in a row.

The earnings calendar is very light next week, with the banks now out of the way. Grocers have the floor, with Sobeys Inc. reporting on Tuesday, and Empire Co. telling its story on Wednesday.