This week’s markets will be focused on U.S. economic data, including a much anticipated Federal Reserve meeting on Tuesday.

In Canada, the only economic data out this week will be June car sales numbers on Wednesday, and the leading indicator on Friday. Neither number will do much to excite markets. “Equities will remain focussed on the earnings picture, while fixed income markets move in synch with Treasuries,” says CIBC World Markets.

In the U.S. on the other hand, there’s an avalanche of data due out. The highlight of the week will be Tuesday’s interest rate decision. Usually these decisions are well telegraphed, but this time, opinions range from no change by the Fed, to a shift in bias, to as much as 50 basis points in rate cuts.

RBC Financial says, “Our view is that Mr. Greenspan will keep rates steady but colour his commentary with risks aplenty in order to communicate very clearly to the markets that he has room to maneuver by way of injecting more monetary policy stimulus if the need arises.”

CIBC World Markets agrees, noting, “Those looking for a quick lifeline from the Fed are in for a disappointment. Clearly, the risks to the economy are no longer balanced between inflation and economic weakness, a fact that the FOMC will likely acknowledge by moving off their balanced stance. But an outright rate cut now would look too panicky for a central bank that only a month or so ago was talking about a reasonably solid recovery. A failure to cut would be a negative for both the front end of the yield curve and equities.”

BMO Nesbitt Burns also sees no chance of a rate cut, but lots of cautionary talk from the Fed. And, TD Bank economists say the interest rate decision is a closer call than usual. “Although a rate cut next week or some time before the end of the year cannot be entirely ruled out, at this time we believe that the Fed will opt to hold rates steady next Tuesday and though to next spring,” says TD.

The other important U.S. data releases this week include retail sales on Tuesday, business inventories on Wednesday, initial jobless claims, industrial production, capacity utilization and the Philadelphia Fed Index on Thursday. Friday brings the University of Michigan’s Consumer Sentiment Survey, the consumer price index and housing starts.

TD says that the U.S. data “will provide a tantalizing glimpse into how the economy was faring heading into the second quarter”.

“Data will feature a mixed picture on retail sales, and a sluggish figure for industrial production in July that will still leave a fairly healthy two-month trend. Housing starts could edge up in light of strong figures on new home sales,” forecasts CIBC. It notes, “Also on the calendar is the August 14 deadline by which CEOs have to sign off on earnings reports to the SEC.

The earnings slate isn’t too exciting this week. The Rogers Sugar Income Fund reports on Monday. AltaGas, Dorel Industries and Wajax Limited report on Tuesday.

Several income trusts report on Wednesday and Thursday. Also, Penn West Petroleum, Premium Brands Inc., Retirement Residences REIT, Southward Energy and TVX Gold report on Thursday. Enerplus Resources is due to report on Friday.