Investors focus on U.S. financials

It was a tough week for North American stocks last week, but I'm back now. European stocks are mostly higher and U.S. index futures are pointing to early gains Monday as investors look for confirmation that U.S. consumers continue to spend and corporate balance sheets -- especially the banks' -- are stronger than they were a year ago. U.S. retail sales kick off the week's economic data points while Citigroup may set the tone today for a handful of heavyweight financials' earnings from the likes of Goldman Sachs, Bank of America and Morgan Stanley through the week.

Citigroup said a few moments ago that first-quarter net profit dipped 2 percent to 95 cents a share, missing the $1 US average estimate of analysts surveyed by Thomson Reuters. However, if you strip out a $1.3 billion credit valuation adjustment, or CVA, the company earned $1.11 per share. Frances says she will explain all this to me later. The headline number was enough to whittle a few points of stock index futures, however.

In Canada, the focus for the week will be on tomorrow's rate announcement from the Bank of Canada. No change to the rate is expected but BoC Governor Mark Carney may try to reinforce his warning to Canadian households that debt levels are too high and that rates must rise sometime, perhaps sooner than many Canadians expect. Carney must also acknowledge that the European debt crisis continues to threaten and austerity measures abroad will weigh on growth for quarters and years to come. He is also likely to point out that China's growth is slowing and that the U.S. recovery remains tepid at best. Convincing Canadians that they should prepare for higher interest rates in the absence of economic growth robust enough to warrant higher rates will be a challenge.

China has loosened its grip ever so slightly on the yuan, allowing the currency to swing 1 percent higher or lower from the government-set daily "parity" rate compared with a band of 0.5 percent that has been in place since 2007. The question is whether this is a big deal or not and currency traders and strategists appear uncertain. The fact is, trading in the yuan rarely tested the previous 0.5 percent band so why would it test the limits of the new band? Does the widening of the band signal a swifter move to a free-floating currency or is it just an easy, pain-free way to muzzle China's currency critics?

We're also watching earnings from Gannett, Mattel and Charles Schwab.

Among the interviews I'm looking forward to today is a conversation with Mike Wekerle, co-founder of Difference Capital and former head of trading at GMP. We'll find out what one of Canada's best and highest-profile traders is up to now and get his thoughts on the markets. He joins us at 5:30 p.m. ET.

Every morning Managing Editor Marty Cej writes a "chase note" to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Click here to have it delivered to your inbox before the trading day begins.