This week’s solid schedule of economic news will get plenty of attention with analysts predicting that the data flow will determine the Bank of Canada’s next move on interest rate.

The most highly anticipated reports will shed light on inflation and manufacturing output. Tuesday’s Federal Reserve meeting hardly merits a mention.

RBC Financial says that this week brings several important updates on the health of the Canadian economy. “New motor vehicle sales for January are slated for release on Monday, and so are IFIC data on monthly mutual fund sales. Vehicle sales have been sliding for five consecutive months now,” it notes.

“Manufacturing conditions in January will also be updated with Tuesday’s release. Thursday will be a busy day with the consumer price index for February, Canada’s international securities transactions in January and travel between Canada and other countries in January all in line for updates.”

BMO Nesbitt Burns sees a dip in the 12-month inflation rate, despite the monthly rate gaining 0.5% on the headline and 0.3% on the core measure. “The great collapse in Canadian inflation is likely to reach its nadir in next week’s CPI report for February,” it says. “The headline inflation rate is expected to probe the lower end of the Bank of Canada’s 1% to 3% target range, as we look for the year-over-year rate to drop to 1% from 1.2% in January.”

CIBC World Markets says that markets tend to focus on the CPI change. “This will look a bit firmer, but any thoughts of inflation will be held at bay by a drop in the 12-month headline rate below 1%, and a potential downtick in the core rate,” it says. “None of that is a surprise to an already-dovish Bank of Canada CPI forecast, but it helps cement the case for further rate cuts.”

Apart from the sketchy inflation picture, CIBC manufacturing shipments numbers will be more critical, “They will capture the same weakness already seen in exports, at the epicentre of the shock from a stronger loonie. If so, expect downward pressure on the Canadian dollar and fixed income yields.”

Nesbitt agrees that the stunning 4.7% drop in merchandise exports in January raises a major warning flag for shipments. However, it believes that manufacturing is unlikely to fully echo the big drop in exports. “Combined with soft auto sales, a brief drop in housing starts, and the slide in exports, a soft manufacturing report would complete the circle and point to a decline in January GDP.”

U.S. economic reports

In the U.S., RBC says that a few data gems will be released this week. “Monday starts it off with updates on industrial production for February and the Empire State survey of manufacturing conditions in New York State. On Tuesday, housing starts for February and weekly chain store sales will be released. Wednesday brings forth the latest update on the consumer price index for February, alongside minor updates on weekly consumer confidence and mortgage applications,” it continues.

“On Thursday, weekly initial unemployment claims are released alongside the Philadelphia Fed survey of manufacturing conditions across Delaware, southern New Jersey and most of Pennsylvania. Friday ends the week with an updated leading indicator of overall economic growth.”

On top of all that, there’s also a Federal Reserve meeting slated for Tuesday. However, CIBC predicts that the Fed meeting will pass uneventfully, “since the missing ingredients for rate hikes — inflation and job growth — are as missing as ever.”

On the data front, Nesbitt says that it will be very interested in a normally-minor report: The Manpower Hiring Survey. “This survey may reveal large companies have plans to beef up their workforces in the near term, a development that has been long-awaited,” it says. “Also of note, the Empire-State and Philly-area factory surveys conducted by the Fed will release March results. These are decent leading indicators of ISM. And CPI is out for March. Another mildly bearish core reading of 0.2% is possible and would turn up the flame a bit on now-dormant inflation expectations.”

CIBC predicts that the CPI will be hit by higher gas prices, but notes there is ample economic slack and falling unit labour costs containing retail prices. It says that industrial production data will be hurt by a weather-related drop in utilities. And, housing starts may see a weather-driven rebound after January’s cold snap brought activity to a halt.