This week won’t see a heavy slate of economic news, but there will be one important announcement. A decision on U.S. interest rates is due Tuesday.

The only data out in Canada this week is Tuesday morning’s Consumer Price Index and retail sales numbers. “In Canada, retail trade could surprise on the upside, as domestic demand continues to provide some offset to a weak export sector. But as in the U.S., fading energy prices will bring a steep decline in the CPI, justifying the Bank of Canada’s latest benign outlook on inflation, and leaving the door wide open for a Fed-matching quarter point cut on August 28,” says CIBC World Markets.

BMO Nesbitt Burns agrees that Canadian rates are going down 25 bps, noting, “Canada’s recent crop of data has produced a drought of good news — employment, shipments, exports, and housing starts all fell heavily. The consumer should rain on this parade of downbeat news, however, with retail sales expected to post a solid 0.5% gain for June.”

The big news of the week will be the U.S. rate decision on Tuesday afternoon. The consensus call is for a 25 basis point cut, although some observers have suggested there’s the possibility of no move at all, or as much as a 50 bps cut.

CIBC World Markets says, “In the U.S., the Fed will likely opt for a cut-and-paste announcement for another quarter point cut, reiterating the cautious message delivered at its previous meeting. Note, however, that the economic data since then have largely surprised on the downside.” BMO Nesbitt Burns agrees that the rates are going down 25 bps, but warns that the policy statement could be gloomy.

TD Bank makes it unanimous, calling for a 25 bps cut this time, and it also sees one at the next Fed meeting in the U.S., as it contemplates the possibility of recession. “The Fed has cut interest rates by 275 basis points just since January and we believe the policy makers will engineer at least two more 25 basis point rate cuts, one each at the August 21st and October 2nd FOMC meetings.”

TD says, “The fiscal policy boost should be all the U.S. economy needs to bridge the gap until the economy responds to the Fed’s rate cuts and regains a firm footing by the end of the year.”

In the U.S., the only remaining data will be Friday’s durable goods orders, but with a rate action in the books and summer quickly dwindling this report shouldn’t catch too much attention. “A fall in July durable goods orders should quash the hopes for a turnaround that emerged after the latest industrial production data,” says CIBC.

On the earnings front, it won’t be super busy next week, but it will mark the start of bank earnings season. CIBC is due to report on Monday, along with Compton Petroleum, and Franco-Nevada Mining.

Royal Bank reports on Tuesday, accompanied by Baytex Energy, Boardwalk Equities and Cominar REIT.

Wednesday we hear from Bonavista Petroleum, Shermag Inc. and TD Waterhouse. On Thursday, it’s TD Bank, along with Ketch Energy.

In the U.S., First Call’s Chuck Hill says, “The financial news focus of the week will be the Fed meeting on Tuesday. But do not ignore earnings reports this week. There are a number of important ones this week. Although some of the biggest retailers like Wal-Mart, Home Depot, Federated, JC Penney and Nordstrom reported last week, there are some major ones this week, including Lowe’s and Toys R Us on Monday, Target on Tuesday, Big Lots on Wednesday, and Kmart, Limited, Intimate Brands, and possibly Dillard’s on Thursday. None of the major tech companies report this week, but Agilent on Monday and Sycamore Networks on Tuesday should attract some attention. Other important earnings announcements include Medtronic on Monday and homebuilder Toll Brothers on Thursday.”