The Philly Fed index is expected to come in at -19 following last month's reading of -24.9. Economists are forecasting the Empire State survey will show a reading of 0.0 following April's level of 0.63.

Mike Englund, chief U.S. economist from Action Economics, said the Philly Fed and Empire State surveys will have the biggest impact on the markets on Thursday.

"The sentiment figures have held up surprisingly well through this slowdown," he said. "These two May reports may tell us either if this pattern will be exacerbated, or if the indexes will finally show (more) weakness with the expected slowing growth."

Looking at the two regional surveys, economists from Capital Economics wrote in their research notes that they aren't expecting the markets to read too much into the two regional surveys, saying that the Empire State is "overly optimistic" and the Philly Fed survey is "too pessimistic".

"We wouldn't be surprised to see a drop back in the Empire State and a recovery in the Philly Fed," the Capital Economics economists said. "Those shifts, however wouldn't necessarily be telling us anything new about the industrial outlook."

April's U.S. industrial production is expected to fall 0.3% following March's rise of 0.3%. Capacity utilization is forecasted at 80.1% following March's level of 80.5%.

In the afternoon, markets will receive the NAHB housing market index, which is expected to remain steady at a reading of 20.

In Canada, the manufacturing shipments report for March will be released. The forecast is for a 0.4% fall following a 1.6% rise in February.

Economists from TD Securities wrote in their research notes that they are expecting Canadian manufacturing shipments to come in flat following increases in the previous two months. They explained that soft auto manufacturing will continue to be a drag on the Canadian manufacturing sector.

"The number will likely be much worse in real terms, since increasing prices in March will have given the nominal figures a significant boost," the economists said. "As the auto sector continues to struggle, the growth in non-durables and the decline in durables will likely be a recurring theme going forward."

All times in EDT

Thursday

8:30 CA Manufacturing Shipments (Monthly) March Exp: -0.4% Prior: 1.6%

8:30 US Initial Jobless Claims Week Ending May 10 Exp: +370K Prior: 365K

8:30 US Continuing Claims Week Ending May 3 Exp: 3035K Prior: 3020K

8:30 US Empire Manufacturing May Expected: 0.0 Prior: 0.63

9:00 US Net Long-term TIC Flows March Exp: $62.5B Prior: $72.5B

9:00 US Total Net TIC Flows March Exp: 67.5B Prior: $64.1B

9:15 US Fed's Evans Gives Welcoming Remarks at Banking Conference

9:15 US Industrial Production April Exp: -0.3% Prior: +0.3%

9:15 US Capacity Utilization April Exp: +80.1% Prior: +80.5%

9:30 US Fed Chairman Bernanke Speaks on Banking Risk Management in Chicago

10:00 US Job Openings and Labour Turnover for April

10:00 US Philadelphia Fed. May Exp: -19 Prior: -24.9

10:15 CA Results of the Bank of Canada PRA

10:30 CA Bank of Canada Spring Review

10:30 US EIA Natural Gas Storage Change Week ending May 9 Exp: +89 Prior: +65

10:50 US New York Fed's Dudley, BofA's Price Speak at Chicago Fed Panel

13:00 US NAHB Housing Market Index May Exp: 20 Prior: 20

19:00 US Fed's Mishkin Speaks on Asset Price Bubbles in Philadelphia

By Neils Christensen, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it