The Bank of Canada's rate decision and semi-annual testimony from Fed Chairman Ben Bernanke are the main events of what is looking to be an action-packed Tuesday. Markets will also be treated to the Canadian new motor vehicle sales, U.S. PPI and the Empire Fed's manufacturing index.

At 7:45 a.m. EDT, the ICSC will release its retail sales report for the week ending July 12. In the previous week, sales advanced by 2.3% year-over-year.

At 8:30 a.m. EDT, Statistics Canada will release new motor vehicle sales for May, which economists expect to come in flat after a 2.6% month-over-month decline in April.

In the United States, the Bureau of Labor Statistics will release its producer price index for June at 8:30 a.m. EDT. The consensus is looking for a 1.4% month-over-month rise in PPI following a 1.4% gain in May, while annual headline PPI is projected to grow 8.7% after rising 7.2% previously. Core PPI is expected to post a 0.3% month-over-month increase after picking up 0.2% in the previous month, while annual core PPI is expected to rise 3.2%, accelerating from May's 3.0% gain.

Also at 8:30 a.m., the U.S. Department of Commerce will release June retail sales data. Economists are expecting a 0.4% month-over-month gain in U.S. retail sales after rising 1.0% in May. Retail sales excluding autos are projected to pick up 1.0% month-over-month after rising 1.2% in the previous month.

Markets will also be paying attention to the Empire Fed's manufacturing index for July at 8:30 a.m. The consensus is expecting the headline indicator to rise to -8.0 from June's -8.7 level. Markets will also be paying attention to the prices paid, new orders and employment indexes, which scored 66.28, -5.48 and 1.16 respectively in June.

At 8:55 a.m. EDT, the Redbook will release its retail sales report for the week ending July 12. In the previous week, sales advanced by 2.9% year-over-year.

At 9 a.m. EDT, the Bank of Canada will make its interest rate announcement. Economists are nearly unanimously expecting the BOC to hold the target for the overnight rate at 3.00%.

Also at 9 a.m., French Finance Minister Christine Lagarde will speak at the European Parliament's Committee on Economic and Monetary Affairs in Brussels, Belgium.

At 10 a.m. EDT, the Fed will release results from a $75 billion TAF auction.

Also at 10 a.m., Investor's Business Daily and the TechnoMetrica Institute will release their economic optimism index for July. Economists are expecting a decline to 36.8 from the previous month's 37.4 figure.

The U.S. Department of Commerce will release business inventories for May at 10 a.m. EDT. The consensus is expecting a 0.5% month-over-month rise, matching the previous month's increase.

The main U.S. event of the day comes at 10 a.m. when Fed Chairman Ben Bernanke will deliver the first of a two-day semi-annual testimony to Congress, starting with the Senate Banking Committee.

At 11:30 a.m. EDT, U.S. Treasury Secretary Henry Paulson will deliver testimony on GSE initiatives to the Senate Banking Committee.

At 1 p.m. EDT, the U.S. Department of Treasury will sell $34 billion in four-week bills.

At 2:15 p.m. EDT, U.S. Assistant Secretary for International Affairs Clay Lowery will deliver remarks to the African Growth and Opportunity Act Forum in Washington, DC.

At 3:30 p.m. EDT, San Francisco Fed President Janet Yellen (non-voter) will speak on U.S. foreclosures at a bank-sponsored event in Los Angeles. No Q&A will follow.

At 5 p.m. EDT, ABC will release its consumer sentiment index for the week ending July 13. The consensus is expecting no change to the previous week's reading of -41.

7:45 US ICSC Chain Store Sales W/E July 12 (Y/Y) Prior: +2.3%

8:30 CA New Motor Vehicle Sales (M/M) May Exp: 0.0% Prior: -2.6%

8:30 US Producer Price Index (M/M) June Exp: +1.4% Prior: +1.4%

8:30 US PPI Ex Food & Energy (M/M) June Exp: +0.3% Prior: +0.2%

8:30 US Producer Price Index (Y/Y) June Exp: +8.7% Prior: +7.2%

8:30 US PPI Ex Food & Energy (Y/Y) June Exp: +3.2% Prior: +3.0%

8:30 US Advance Retail Sales June Exp: +0.4% Prior: +1.0%

8:30 US Retail Sales Less Autos June Exp: +1.0% Prior: +1.2%

8:30 US Empire Manufacturing July Exp: -8.0 Prior: -8.7

8:55 US Redbook Retail Sales W/E July 12 (Y/Y) Prior: +2.9%

9:00 CA Bank of Canada Rate Decision 15-July Exp: 3.00% Prior: 3.00%

10:00 US IBD/TIPP Economic Optimism July Exp: 36.8 Prior: 37.4

10:00 US Business Inventories May Exp: +0.5% Prior: +0.5%

10:00 US Bernanke Gives Semiannual Monetary Policy Testimony at Senate

13:00 US Treasury to Sell $US34 billion in 4-Week Bills

14:15 US TSY's Paulson to speak at African event at the U.S. State Department in Washington D.C.

15:30 US Fed's Yellen Speaks in Los Angeles at Conference 15-July

17:00 US ABC Consumer Confidence 13-July Exp: -42 Prior: -41

By Erik Kevin Franco and edited by Nancy Girgis