Expectations for U.S. interest rate increases have collapsed in recent weeks, with the steady flow of disappointing economic news. So, while few observers expect the Federal Reserve to give any hints about tighter policy next week when it releases its monetary policy statement on Wednesday, all eyes will be looking for subtle clues on the economy.
Fed chairman Ben Bernanke has already made statements on the economy, of course, sticking to the line that the recent bout of weakness is short-term and mostly related to the earthquake and tsunami that struck Japan in March, along with high commodity prices. But next week's statement will provide a more up-to-date view and relate it to monetary policy.
The statement will be released earlier than usual, at 12:30 p.m. (ET), to accommodate the Fed chairman's second press conference, following at 2:15.
In other economic news, investors and economists will be looking at U.S. existing home sales, new home sales and durable goods orders. Canadian economic news will be confined to April retail sales.
In earnings news, key U.S. company earnings will include FedEx Corp. and Bed Bath & Beyond Inc. on Wednesday, followed by Oracle Corp. In Canada, AGF Management Ltd. will report on Wednesday.