Market watchers will get more than they can handle this week, with central bankers dominating the headlines.

A Bank of Canada rate meeting and policy report will lead the way in Canada , whereas, the minutes from an old Fed meeting in the U.S. may be the biggest news stateside next week.

The Bank delivers a rate decision Tuesday, and releases the semi-annual Monetary Policy Report on Thursday. Also, merchandise trade data is out Tuesday, Alberta hands down a budget on Wednesday, manufacturing shipment data is due Friday. And, Bank chief David Dodge speaks on Friday too.

Looking ahead to Tuesday, TD Bank economists report that the overwhelming expectation is that the Bank of Canada will remain on hold, leaving the overnight rate at 2.5%. “Given the lack of uncertainty surrounding the Bank’s rate decision on Tuesday, the big event of the coming week is actually Thursday’s Monetary Policy Report,” TD suggests. “The MPR should shed some light onto the Bank’s views concerning oil, inflation, the ongoing effects of the Canadian dollar, and the outlook for the overall economy.”

“The MPR is expected to drum home the point that rates will eventually rise, but we expect the Bank to
soften the message with warnings about risks and uncertainties, indicating that rate hikes will be more of an issue for the second half of the year,” BMO Nesbitt Burns adds.

Beyond that, the manufacturing and trade data should be rather important too. “Industrial price hikes will give a boost to both exports and manufacturing shipments, with the former likely to be more impressive as Statistics Canada data correct a puzzling gap that has had factory shipments doing much better than export tallies,” CIBC World Markets says. “Though we don’t expect a rate hike this year, the Bank of Canada’s report and statement might be judged marginally negative for fixed income markets if, as we
expect, Dodge sounds more optimistic on growth.”

In the US, the goods & services balance is reported on Tuesday, followed by retail sales on Wednesday, business inventories on Thursday, and industrial production, capacity utilization and University of Michigan sentiment report on Friday. But, traders are most interested in the debate that went on at the last Fed meeting, the minutes of that meeting will be released on Tuesday.

“The minutes from the March 22 FOMC meeting will be dissected for a definitive answer to the question: Was the insertion of the critical phrase ‘with appropriate monetary policy action’ before the boilerplate reference to balanced risks to sustainable growth and price stability a signal that the Fed might have to up its tightening ante?” BMO Nesbitt notes. “Some Fed officials, such as St. Louis Fed President Poole, have indicated that the market correctly picked up on this nuance, but there is nothing like seeing it in black and white.”

On the data front, CIBC predicts, “ Retail sales won’t look that impressive when drilled down to the ex-autos, ex-gasoline core, and industrial production will also be on the tame side.”

BMO Nesbitt predicts that February’s trade deficit will likely widen to $58.8 billion from $58.3 billion in January. Import prices are expected to spike 1.7% in March, driven by a 13.2% surge in oil. And, it expects retail sales to register a 1.0% gain in March. “In April, however, as the Easter and tax effects fade, the pocketbook squeeze caused by record-high gasoline prices could start having an influence on discretionary spending as it did last spring. It is already having an impact on household optimism. We look for the preliminary University of Michigan sentiment index to decline to 91.6 in April from 92.6 in the prior month, its lowest level since last May.”

“All told, the data are in line with the last payrolls report, which took fears of an economic overheating down a notch,” CIBC concludes. “But oil market volatility is likely to remain of even greater interest, since in the past several weeks, WTI has been a major market mover for both equities and bonds.”

There earnings schedule is very light next week. Chum reports on Thursday, that’s about it for Canadian firms. A few big US techs, including Apple, Sun Micro, AMD and Infosys also report next week. And, heavyweights Citigroup and GE report on Friday.