The week is a little quieter in Canada but markets will still receive important housing and manufacturing data.

Andrew Tilton, Canada and U.S. economist from Goldman Sachs, said the focus for U.S. markets this week will be retail sales and CPI data. Economists expect CPI to rise 0.2% for April.

He added that, in the coming months, the focus will be on the divergence between the headline and core data.

"The core data has been fairly stable but the increase in food and energy costs is causing a problem and we could start to see that in the headline numbers," he said.

Dean Maki, chief U.S. economist from Barclays Capital, said although inflation is expected to tick lower, it is not going to make a big difference with headline inflation running at 4.00%.

He added with rising food and energy costs, they are paying more attention to the headline number than the core numbers.

"We think the headline numbers are more consistent with future trends," he said. "Rising energy costs aren't expected to go down so we don't think it's reasonable to separate them out.

"We think inflation is running at a pace that is putting a lot of pressure on consumers," he added.

Looking at retails sales, Tilton said he is not very optimistic for a strong number. He pointed out that weak auto sales will drag down the headline number. He added the core data will fare a little better but still look softer.

"We have seen a huge range of pressures on the consumer right now and that will drag down retail sales," he said

Maki said they are a little bit more optimistic about April retail sales. He pointed out that it will be no surprise if the headline data will come in weaker as a result of poor auto sales. He added that gas prices, on a seasonable adjusted basis, were lower, which may have helped consumers.

"I am expecting a solid pace in April because of better weather during the month and lower gas prices." he said.

Andrew Gretzinger, portfolio manager at MFC Global Investments, said that although retail sales and CPI will garner most of the market attention, it's a big week for economic data. He said jobless claims and housing data will be big reports.

"People will be anxious to see what kind of condition the housing market is in." he said. "The NAHB is expected to remain steady, but I don't know. I guess we will see. Permits will be more important than starts because it will tell us what to expect next month."

Looking to Canada, Gretzinger said that although it is a lighter weak, there is still important data, like the new housing price index and the manufacturing shipments.

"People in Canada are worried about the housing sector because of what is happening in the U.S. Although the housing sector is starting to slow, it is not as bad as the U.S.," he said. "Buying a house is going to be the biggest investment in a person's life so right now people are a little worried about what is going to happen."

Gretzinger said the manufacturing shipments data is going to be an important report because the sector has been under a lot of pressure.

"Manufacturing shipments continue to push forward despite the slowing of the U.S. economy," he said. "The data will provide important insight in first quarter GDP."

Tilton said he is expecting a weaker print for Canadian manufacturing shipments because of the slowdown in the U.S.

"Generally speaking the question is how much spillover is coming from the U.S. (and how much) we are seeing in the manufacturing sector," he said.

All times in EDT

Monday: The U.S. federal government will release its monthly budget statement for April. Economists expect that the government spent $160 billion in the month, compared to $177. 7 billion spent in March.

In Canada, markets will receive important housing data with the release of March's housing price index. The consensus calls for an increase of 0.2%

8:20 CA Flaherty to Address the Economic Club of Toronto

8:30 CA New Housing Price Index (Monthly) March Exp: +0.2% Prior: +0.3%

9:15 US Fed's Evans Speaks About U.S. Economic Outlook in Illinois

13:00 US Treasury to Sell S24B 3-Month Bills

13:00 US Treasury to Sell $23B 6-Month Bills

14:00 US Monthly Budget Statement April Exp: $160.0B Prior: $177.7B

19:15 US Fed's Lockhart to Speak at Financial Markets Conference

Tuesday: It's a busy day for markets with the release of April's U.S. retail sales. The core sales, excluding autos, are expected to rise 0.2% following March's rise of 0.1%. The headline index is forecasted to fall 0.2% following last month's rise of 0.2%.

Markets will be able to see how well U.S. consumers are holding up with the release of IBD/TIPP economic optimism. The data is forecasted to come in at a reading of 38 for May, down April's level of 39.2.

Furthermore, the April U.S. import price index, which is expected to rise 1.6% following March's 2.8%, will be released. The annualized rate is expected to increase 15.0% following March's increase of 14.8%.

6:10 US Fed's Pianalto, ECB's Noyer Speak on Monetary Policy in Paris

7:45 US ICSC Weekly Store Sales Prior: +3.6%

8:20 US Fed's Bernanke Speaks on Liquidity Measures to Conference

8:30 US Import Price Index (Monthly) April Exp: +1.6% Prior: +2.8%

8:30 US Import Price Index (Annualized) April Exp: +15.0% Prior: +14.8%

8:30 US Advance Retail Sales April Exp: -0.2% Prior: +0.2%

8:30 US Retail Sales Less Autos April Exp: +0.2% +0.1%

8:55 US Redbook Weekly Retail Sales Prior: +1.4%

9:15 US Fed's Warsh Moderates Discussion on Sarbanes-Oxley Act

10:00 US IBD/TIPP Economic Optimism May Exp: 38 Prior: 39.2

10:00 US Business Inventories March Exp: +0.5% Prior: +0.6%

10:30 CA BOC Treasury Auction

11:00 US Fed's Plosser Moderates Discussion on Fair Disclosure

11:15 CA BOC Conducts Repurchase Operation

13:00 US Treasury to Sell 4-Week Bills

13:00 US Yellen Speaks on U.S. Economic Outlook at Vancouver Conference

13:00 US Fed's Hoenig Speaks in Oklahoma City on Economic Outlook

13:30 US Fed's Fisher Speaks About Fed & Economy in Midland, Texas

17:00 US ABC Consumer Confidence 11-May Prior: -46

Wednesday: Markets will be focused on U.S. inflation data for April. Economists forecast annualized core CPI to rise 2.4% following March's annualize rise of 2.4%. The monthly core CPI is expected to rise 0.2% following March's similar rise.

With oil prices hitting record highs on an almost daily basis, markets will also pay attention to DOE crude oil inventories, which rose 5,654,000 barrels the previous week. Gasoline inventories rose 794,000 barrels, distillate inventories fell by 107,000 barrels and refinery utilization fell by 0.41% last week.

7:00 US MBA Mortgage Applications 9-May Prior: +15.6%

8:30 US Fed's Rosengren Speaks on Basel II at Boston Conference

8:30 US Consumer Price Index (Monthly) April Exp: +0.3% Prior: +0.3%

8:30 US Consumer Price Index Ex Food & Energy (Monthly) April Exp: +0.2% Prior: +0.2%

8:30 US Consumer Price Index (Annualized) April Exp: +3.9% Prior: +4.0%

8:30 US Consumer Price Index Ex Food & Energy (Annualized) April Exp: +2.4% Prior: +2.4%

8:30 US Consumer Price Index Core Index (SA) April Prior: 214.176

8:30 US Consumer Price Index (NSA) April Exp: 214.715 Prior: 213.528

9:15 US Fed's Kroszner Speaks on Basel II, Operational Risk in Boston

10:30 US DOE U.S. Crude Oil Inventories Week Ending May 9 Prior: +5654K

10:30 US DOE U.S. Gasoline Inventories Week Ending May 9 Prior: +794K

10:30 US DOE U.S. Distillate Inventory Week Ending May 9 Prior: -107K

10:30 US DOE U.S. Refinery Utilization Week Ending May 9 Prior: -0.41%

12:00 US Fed's Lockhart to Speak at Financial Markets Conference

Thursday: It's going to be a big day with lots of data for markets to digest. U.S. regional manufacturing surveys are starting to come out, the first being the Empire State manufacturing index, which is expected to show a reading of 0.0 following April's level of 0.63. The second survey will be the Philly Fed index, which is expected to come in at -19, following last month's reading of -24.9

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

The Canadian manufacturing shipments report for March will be released. The forecast is for a 0.5% fall following a 1.6% rise in February.

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

8:30 CA Manufacturing Shipments (Monthly) March Exp: -0.5% Prior: 1.6%

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 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 Philadelphia Fed. May Exp: -19 Prior: -24.9

10:30 US EIA Natural Gas Storage Change Week ending May 9 Prior:

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

Friday: The week ends with the preliminary reading of the University of Michigan/Reuters consumer sentiment for May. The consensus is calling for a reading of 62.5 following 62.6 in April.

U.S. housing starts and building permits for April will also be released. Economists expect housing starts to come in at 935,000 units down from March's 946,000 units. Building permits are expecting to come in at 910,000, also down from March's reading of 927,000.

8:30 CA New Motor Vehicle Sales (Monthly) March Exp: +0.1% Prior: -3.2%

8:30 US Housing Starts April Exp: 935K Prior: 947K

8:30 US Building Permits April Exp: 910K Prior: 927K

10:00 US University of Michigan/Reuters consumer Sentiment May Preliminary Exp: 62.5 Prior: 62.6

11:20 US Fed's Braunstein, Goldman's Hatzius Speak on Mortgage Market

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