The coming week’s key economic news will likely the Federal Open Market Committee’s decision on U.S interest rates. It is widely expected that the FOMC will raise the federal funds rate by another 25 basis points.

Market watchers will be paying close attention to the wording of the FOMC release, looking for hints of future rate increases.

A 25 basis-point increase would bring the federal funds rate to 3.5%, the 11th such increase since the central bank began to raise rates in June 2004 to keep inflation in check.

The Fed announcement is due on Tuesday at 14:15 p.m. ET.

In Canada, a pair of reports will give clues on the strength of Canada’s housing market.

On Monday, Statistics Canada releases building permit data for June. Economists expect a gain of 2%.

On Wednesday, StatsCan releases the new housing price index for June. Economists expect a gain of 0.4%.

On Friday, Statistics Canada releases data on international merchandise trade for June. Economists expect a surplus of $4.3 billion.

South of the border, the FOMC releases its decision on interest rates on Tuesday afternoon.

On Thursday, the U.S. Commerce Department releases retail sales data for July. Economists expect a gain of 2%.

Separately, the U.S. Department of Labor releases initial jobless claims data for the week ended August 6. Economists expect 315,000 claims.

On Friday, the Commerce Department releases trade balance data for June. Economists expect a deficit of US$57.2-billion.

Canadian corporate earnings will continue to flow this week, with reports due from retailers Rona Inc., Metro Inc., and Canadian Tire Corp. Ltd.

In addition to the retailers, Alcan, Onex Corp., CAE Inc., ING Canada, CP Ships Ltd. and Royal Group Technologies Ltd. will unveil quarterly earnings.

Alcan Inc. reports second-quarter results on Monday.

Finning International Inc. reports second-quarter results on Tuesday, as does Dorel Industries Inc. and Zenon Environmental Inc.

Lions Gate Entertainment Corp. reports first-quarter results.

On Wednesday, Onex Corp. reports second-quarter results, as does Sleeman Breweries Ltd., Magna International Inc., and Rona Inc.

Hummingbird Ltd. reports third-quarter results, and Danier Leather Inc. reports fourth-quarter results.

On Thursday, second quarter results are due from CP Ships Ltd., Bema Gold Corp., Canadian Tire Corp. Ltd., Royal Group Technologies Inc., and Four Seasons Hotels Inc.

CAE Inc. reports first-quarter, 2006, results.