With Canadian markets closed for Canada Day on Tuesday and U.S. markets shuttered on Friday for Independence Day, next week promises to be a low-volume affair.

There is no economic data scheduled to be released in Canada next week, leaving traders to focus on U.S. data in a holiday-shortened week.

“Markets will likely focus their attention on U.S. indicators out during the week before they return their attention to Canada in the week following, with the anticipated release of the June Labour Force Survey on July 11,” RBC Financial Group says.

BMO Nesbitt Burns Inc. suggests traders may also watch the monthly meeting by the Reserve Bank of Australia. “The RBA has been one of the few other central banks to have tightened policy since 2002, but soft global growth, the SARS threat, and a surging currency have put the RBA on hold and prompted Governor Macfarlane to suggest they are poised to cut rates,” Nesbitt says. “A rate reduction next week would fire up talk that the Bank of Canada may be leaning in that direction as well. The key difference between the two is that Australian rates are at 4.75% versus 3.25% in Canada.”

On the U.S. data front, the Chicago purchasing managers’ index will be released on Monday, the June Institute for Supply Management index is out on Tuesday, factory orders on Wednesday, and the non-manufacturing ISM on Thursday. June non-farm payrolls report also will be released Thursday providing an update on labour market conditions.

“Factory purchasing managers should see a few more signs of growth in the June ISM, likely representing a production catch-up after lightening up on inventories in the past few months,” says CIBC World Markets. “In some sense, that will be a lagging indicator, given that May industrial production already showed a small increase after months of decline.”

BMO says there is a good possibility that the U.S. factory sector “is starting to hum again.” It points out that the regional surveys have been decent leading indicators of the national ISM lately, and they have been signaling an improvement for June. “If so, this will give weight to the idea that the big decline in the dollar has made U.S. companies more competitive,” BMO says.

Still, Thursday’s employment report will be the bigger news, “We expect a further and unsurprising small decline in payrolls,” says CIBC. “That would be no real surprise given the trend in jobless claims. The claims data should be viewed with caution over the next few weeks, as late June and early July figures are typically distorted by swings in the timing of re-tooling shutdowns in the auto sector.”

BMO also expects the report to produce a seasonally adjusted decline, and another uptick in the unemployment rate. “Certainly, small businesses are not in hiring mode yet. In July, the seasonal hurdle reverses and we may start to see some better numbers,” it says.

“The data flow is likely to be relatively bond-friendly in coming weeks,” BMO predicts. “Our spot forecast is for better data beginning in early August when July figures start to appear. But, in the meantime, June leading employment indicators have been bleak, with only an occasional ray of sunshine peaking through parting clouds, such as a drop in new claims for jobless insurance in late June. Surveys of households and businesses, on the other hand, uniformly say no job growth is occurring yet. This is echoed by extraordinarily low help-wanted advertising.”

Other data of possible interest is the Japanese Tankan survey for June, which is out on Tuesday. “Look for the index to stabilize at -10 as a few indicators have pointed to some bottoming in economic activity,” says BMO.

The earnings calendar is also light next week, with Cogeco Cable and Cogeco Inc. reporting on Monday and Alimentation Couche-Tard Inc. on Thursday.