War and terror worries continue to hang over the market, but there will be a fair amount of economic data out this week, and a slew of earnings reports from Canada’s banks.

On Monday, Canada’s international securities transactions data is out. Tuesday sees U.S. existing home sales for January and the Conference Board’s U.S. consumer confidence report, along with Canadian data on industrial prices.

Canada’s consumer price index is out on Thursday, along with U.S. initial unemployment claims, durable orders and new home sales.

On Friday, the U.S. releases include fourth-quarter advance GDP numbers, the Chicago purchasing managers’ index and the University of Michigan’s Consumer Sentiment Survey. In Canada, a December update to monthly GDP numbers is due, as is the current account balance.

“In the U.S., a soft week for data will feature a rebound in the durable goods report after a two month decline, likely catching inventory rebuilding downstream. What had looked like a big upcoming revision in Q4 GDP growth was cut down to size by a disappointing trade report for December,” says CIBC World Markets. “Otherwise, the war clouds will remain front and center, underpinning a further drop in consumer confidence. But more importantly, markets will be keeping a close eye as the US/UK coalition tries to get the UN Security Council to set a deadline for Iraqi compliance — and in effect, a timetable for war.”

BMO Nesbitt Burns agrees that war worries likely dominate this week. “U.S. data will continue to either take a back seat, or not even be on the bus, this week as markets digest war rumours to get a sense of proper direction. There will be some interest in the two major confidence reports. However, there is little chance that they will show that spirits lifted in the current situation and, clearly, there is a very high probability that confidence will soar on a successful war outcome,” it says.

CIBC predicts that Canadian GDP should manage only a moderate 0.2% December gain. “But with the Bank of Canada meeting set for the following week, CPI might take center stage. It will take a keen eye on the inflation numbers to unravel the true story, since the data will capture a number of one-off swings that bear no relevance for the medium term outlook,” it says. “The best indicator to watch might be the seasonally-adjusted monthly change excluding food and energy, which will strip out both base year effects as well as developments in gasoline and in Ontario power pricing.”

Nesbitt says that the CPI is expected to have risen by 0.7% in January, as the retail price of gasoline jumped 4.8% during the month. “Colder weather and the seemingly inevitable march toward war pushed energy prices upward. These factors will also boost industrial product and raw materials prices. The year-over-year CPI inflation rate is likely to rise to 4.3%, well above the Bank of Canada’s comfort zone. Even core inflation is likely to record an increase, rising back above the top of the Bank of Canada’s target range to 3.1%.”

Nesbitt also says that it expects the cooling of Canadian economic growth in the latter part of the year will be evident in the GDP report, “which is expected show that the economy expanded by 2.3% (annualized) in the fourth quarter — the slowest growth rate in over a year.”

“The current account is seen remaining in healthy surplus, down only slightly from the third quarter, reflecting the modest deterioration of the trade balance through the quarter,” BMO notes.

On the earnings front, the banks will be the big news this week. Scotia says that Magna International reports on Monday. Bank of Montreal leads the way on Tuesday.

Canadian Natural Resources reports Wednesday, along with RONA, Thomson Corp. and Torstar Corp.

B2B Trust, CIBC, Canadian Western Bank, Four Seasons, Laurentian Bank, National Bank and TD Bank all report on Thursday.

Alliance Atlantis, Investment Executive’s parent company, G.T.C. Transcontinental, and Royal Bank report on Friday.