By Theresa Sheehan

PRINCETON (SMRA) – The week-ahead swings back to a much slower pace
for release of economic data. Appearances by central bankers is also
scarce, but Federal Reserve Chairman Ben Bernanke’s semiannual monetary
policy testimony Wednesday will make up for any lack of comments from
other Fed officials.

Chairman Bernanke will appear before the Senate Banking Committee
Wednesday at 10:00 a.m. ET to delivery his semiannual monetary policy

A spokesman for the House Financial Services Committee said that he
expected Bernanke to appear before the House panel the following day,
Thursday, July 22, to give testimony before the House.

Governor Dan Tarullo will go before the Senate Banking Committee on
mid-morning Tuesday to speak about financial regulation.

Governor Elizabeth Duke will deliver welcoming remarks at an FDIC
hearing on the Community Reinvestment Act on Monday morning.

The only major central bank to have an announcement scheduled is
the Bank of Canada Tuesday morning. At its last announcement, the Bank
hiked the overnight rate by 25 basis points to 0.50%, its first change
in rates since the end of the cumulative 425 basis point rate cutting
cycle in March 2009. The Bank will probably take its overnight rate a
notch higher in this statement, although that is by no means certain.

It expressed caution going forward in the May announcement, which
coincided with the financial market volatility related to the news on
sovereign debt problems in Europe. Things seem to have stabilized in the
interim, and the domestic news on the economy has largely been
supportive of modest growth.

The highlights of the U.S. economic data calendar during the week
revolve around the housing market.

The NAHB/Wells Fargo Housing Market Index for July is out
mid-morning Monday, and will help set the tone for conditions in
housing. The June reading for the index dropped to 17, down five points
from the previous month. The decline was attributed to the end of the
homebuyer tax credit program, and a less optimistic outlook for new home
building going forward. Those conditions persisted into June.

The data on June housing starts and permits issued will be released
Tuesday morning, and will probably reflect continued low levels for new
construction for residential properties of all sizes. Nonetheless, in
spite of the sluggishness in the overall housing market, lows supplies
of new homes means there will be some activity in new building at
restrained levels.

Thursday, the National Association of Realtor’s report on sales of
existing homes will be released mid-morning. Home resales are expected
to increase in June as a number of closings related to the homebuyer tax
credit program are completed. The decline in the May data was attributed
to the inability of many contracts to be wound up due to the volume of
sales agreements in March and April. These contracts had a deadline of
June 30 for completion, but that has been extended until the end of
September. The vast majority should be in place in June and July, but
there will be some holdover into August and September.

The FHFA House Price Index at the same time Thursday could show
another decline in house prices on a month-over-month basis, and also
when compared to the year-ago month. The period of steep and sudden
drops is over, and prices are off the worst of the bottom in the housing
correction. Nonetheless, the weakness in housing is keeping home prices
from any sustained upward movement in values.

The Conference Board’s Leading Economic Index for June comes out
mid-morning Thursday as well, and will probably decline due to lower
stock prices, a contracting workweek, slower vendor performance, and
declining building permits. This would be the first decrease in 15
months, but should not be taken as a sign of imminent return to
recession. Some of the conditions making negative contributions in June
have reversed in July.

Initial jobless claims for the week-ended July 17 Thursday morning
will still see some of the impacts from the mismatch of seasonal
adjustment factors. GM’s decision to keep some plants open during what
is usually a period when operations shut down for retooling makes it
likely the claims number will be lower than it might in most years. This
is also the survey comparison week for June from May.

The BLS data on state unemployment for June is out Tuesday, and
the numbers for mass layoffs Friday.

The Treasury will announce new 2-, 5- and 7-year notes on Thursday
to auction the following Tuesday, Wednesday, and Thursday, respectively.
All will settle on August 2.

** Stone & McCarthy Research Associates **