Inflation data in the U.S. and Canada will be highlight the coming week's data, but it won't have much impact on market direction, according to some strategists.

In other data, markets will also receive regional manufacturing data for November with the release of the Empire State and Philly Fed surveys. U.S. housing starts and building permits will also be released throughout the week.

Paul Mendelson, chief investment officer from Windham Financial Services, said that even if U.S. CPI is higher than expected, investors won't take the number seriously. He said he doesn't see inflation problems with the current economic problems.

"How can inflation not be falling in this environment?" he said.

Mendelson added that the best move for investors and traders right now is to take advantage of the range trading in equities. He pointed out that as equities test the lows, investors should be buying; as they test the highs, investors should sell.

"There is no reason to chase this market anymore. You wait for the pullback and buy on the pullback because there will be sellers into every rally," he said.

Jimmy Tintle, futures broker at agrees but after the sharp moves on Nov. 13 he said he has seen the highs shift a little. Looking at S&P futures, Tintle said the new range is from 820 to 950.

"I don't think there are any fundamental reports out there that will change these markets," he said.

Tintle said the data could provide some short-term volatility, but it will also depend on where the markets are trading before the data.

"I don't think any of the moves will be sustainable. I think we are in this range and maybe move slightly higher by the end of the year," he said.

Equities aren't the only markets range-bound. Kevin Goodman, managing director at Chapin Davis, said he is looking to equities to determine bond moves. Looking at the 10-year yield, Goodman said he sees it trading in a range of 4.10% and 3.60%.

"Every time I see markets getting completely trashed I have been a seller and when markets come back I have bought again," he said. "It's almost like clockwork."

Mike Leavitt, fixed income strategist from MF Global, said he definitely is a buyer of both Canadian and U.S. 10-year bonds. He said the trend right now is for lower yields.

"If you look at the 10-year note (prices) I think we are closer to the bottom than the top," he said. "I think we still have a ways to go especially in the long end of the curve."

George Androulidakis, director of FX at the National Bank of Canada, said the trend with currency markets is the correlation with equities. As equities rise the U.S. dollar falls, and vise versa.

Looking at the Canadian dollar, Adroulidakis said as commodity prices fall, there is still room for more weakness in the loonie. Looking at next week he said there is a good chance the USD/CAD could trade at the 1.26 CAD level. In the broader trend, he said he still sees gains for the U.S. dollar.

"I think right now currencies are going to be range-bound," he said. "My position is slightly neutral to slightly bullish on the U.S. dollar."

"My worry for next week that a break through the new lows in equities will punish the high yielders and boost the U.S. dollar and yen," he added.

All times in EST:


All eyes will be on Washington, DC as G20 finance ministers and central bank governors meet to discuss the growing economic crisis.

November 15 US G20 economic meeting in Washington D.C.


The week starts with the release of more manufacturing data. Markets will receive the Empire State manufacturing survey for November, which is expected to fall to a reading of -26.8 following October's reading of -24.6.

The second manufacturing report is the October industrial production and capacity utilization. Economists expect industrial production to rise 0.2% following a 2.8% decline in September. Capacity utilization is expected to inch slightly lower to 76.3% from 76.4% in September.

8:30 US Empire State Manufacturing survey November Exp: -26.1 Prior: -24.6

9:00 US Kansas City Fed President Thomas Hoenig to Speak on Regulation at an event in New York

9:15 US Industrial Production October Exp: +0.2% Prior: -2.8%

9:15 US Capacity Utilization October Exp: 76.5% Prior: 76.4%

11:30 US Treasury to Sell $35B 254-Day Cash Management Bills

13:00 US Treasury to Sell $27B 3-Month Bills

13:00 US Treasury to Sell $27B 6-Month Bills


The data starts to pick up with the release of the U.S. producer price index for October, which is expected to decline 1.8% following a 0.4% decline in September. The annualized core PPI is expected to remain steady with a rise of 4.0%.

8:30 US Producer Price Index (M/M) October Exp: -1.8% Prior: -0.4%

8:30 US PPI Ex Food & Energy (M/M) October Exp: +0.1% Prior: +0.4%

8:30 US Producer Price Index (Y/Y) October Prior: +6.2%

8:30 US PPI Ex Food & Energy (Y/Y) October Exp: +4.0% Prior: +4.0%

9:00 US Net Long-term TIC Flows September Prior: $14.0B

9:00 US Total Net TIC Flows September Prior: -$0.4B

13:00 US NAHB Housing Market Index November Exp: 14 Prior: 14

13:00 US Treasury to Sell $22B 52-Week Bills

13:00 US Treasury to Sell 4-Week Bills

17:00 US ABC Consumer Confidence W/E November 16 Exp: -49 Prior: -50


All eyes will be on U.S. CPI to see if inflation is starting to fall. Economist expect U.S. headline CPI to fall 0.8% following a flat reading in September. Core monthly CPI is expected to show a 0.2% rise following a previous rise of 0.1%. The annualized core inflation rate is expected to show a rise of 2.4% following September's rise of 2.5%.

Markets will also receive more U.S. housing data with the release of October housing starts and building permits. The consensus is for housing starts to decline to 786,000 following 817,000 starts in September. Building permits are expected to come in at 773,000, down from September's revised permits of 805,000.

In the afternoon, markets will be interested to read the minutes of the Fed's monetary policy meeting from Oct. 28 and 29. The Fed cut interest rates by 50 basis points, bringing rates down to 1.00%.

7:00 US MBA Mortgage Applications W/E November 14 Prior: 11.9%

8:30 CA International Securities Transactions September Exp: -C$1.500 Prior: -C$0.730

8:30 CA Leading Indicators (M/M) October Exp: -0.2% Prior: -0.2%

8:30 US CPI (M/M) October Exp: -0.8% Prior: 0.0%

8:30 US CPI Ex Food & Energy (M/M) October Exp: +0.2% Prior: +0.1%

8:30 US CPI (Y/Y) October Exp: +4.0% Prior: +4.9%

8:30 US CPI Ex Food & Energy (Y/Y) October Exp: +2.4% Prior: +2.5%

8:30 US CPI Core Index SA October Prior: 216.956

8:30 US Consumer Price Index NSA October Exp: 216.700 Prior: 218.783

8:30 US Building Permits October Exp: 773K Prior: 786K Revised: 805K

8:30 US Housing Starts October Exp: 780K Prior: 817K

8:00 US Fed Vice-President Donald Kohn Speaks on Asset Prices at Cato Conference

10:35 US DOE U.S. Crude Oil Inventories Prior: 22K

10:35 US DOE U.S. Gasoline Inventories W/E November 14 Prior: 1982K

10:35 US DOE U.S. Distillate Inventory W/E November 14 Prior: 516K

10:35 US DOE U.S. Refinery Utilization W/E November 14 Prior: -0.69%

13:30 US Richmond Fed President Jeffrey Lacker Speaks at Conference on Subprime Crisis

14:00 US Fed Releases Minutes and Forecasts from Oct. 28-29 monetary policy meeting


Markets will receive more regional manufacturing data with the release of the Philly Fed survey, which economists expect to fall to a level of -35.0 following October's level of -37.5.

Markets will also be interested to hear from Treasury Secretary Henry Paulson when he speaks at the Reagan Library in Simi Valley, California.

8:30 CA Wholesale Sales (M/M) September Exp: -0.7% Prior: -1.5%

8:30 US Initial Jobless Claims W/E November 16 Exp: 501K Prior: +516K

8:30 US Continuing Claims W/E November 8 Exp: 3878K Prior: 3897K

10:00 US Philadelphia Fed manufacturing survey November Exp: -35.0 Prior: -37.5

10:00 US Leading Indicators October Exp: -0.6% Prior: +0.3%

10:30 US EIA Natural Gas Storage Change W/E November 14 Prior: 46 Bcf

14:00 US Treasury Secretary Henry Paulson to speaks at an event in Simi Valley, California

21:00 US St. Louis Fed President James Bullard to Speak economic conference in Indiana


All eyes will be on Canada with the release of October's inflation data. Economists expect Canadian inflation to fall 0.4% following a 0.1% rise in September. Annualized core inflation is expected to rise 1.9% following a 1.7% rise in September. The monthly core data is expected to be flat following a 0.4% rise in September.

7:00 CA Consumer Price Index (M/M) October Exp: -0.4% Prior: +0.1%

7:00 CA Consumer Price Index (Y/Y) October Exp: +3.3% Prior: +3.4%

7:00 CA Bank Canada CPI Core (M/M) October Exp: 0.0% Prior: +0.4%

7:00 CA Bank Canada CPI Core (Y/Y) October Exp: +1.9% Prior: +1.7%

8:15 US Richmond Fed President Jeffrey Lacker speaks on financial conditions at an event in Maryland

12:15 US Philly Fed President Charles Plosser speaks on the financial crisis at an event in Philadelphia 12:40 US Chicago Fed President Charles Evans speaks to economists at an event in Indianapolis

By Neils Christensen and edited by Nancy Girgis
©CEP News Ltd. 2008