Canadian investors have plenty to absorb this week, including key economic growth data for Canada and the U.S. while the big Canadian banks start to post their latest quarterly earnings.

Markets will be most anxious to get the latest read on what kind of performance the U.S. economy turned in during the fourth quarter.

The TSX ended last week up 268.47 points or 2.14 per cent, leaving the main Toronto index up 6.44 per cent year to date. Much of that rise has been attributed to a string of stronger than expected American economic data, including greater expansion in the manufacturing sector and two months of back to back job gains of more than 200,000, in December and January.

Traders hope Wednesday's latest look at fourth quarter performance will reinforce the view that the American economy is steadily getting back on its feet following the worst recession since World War Two.

The first look at U.S. fourth quarter GDP had the economy rising at an annual rate of 2.8 per cent.

"Keep in mind (the original report) came in a little bit below initial expectations at 2.8 per cent," said BMO Capital Markets senior economist Doug Porter.

"We think it might be revised upward slightly, it does look like the first revision might take it closer to that three per cent estimate."

However, Porter is cautious in his estimate, observing that "in the last couple of years is that most of the US GDP surprises have been to the low side, both in good times and bad."

In Canada, traders will get the first official estimate for how the economy grew during 2011. On Friday, Statistics Canada releases gross domestic product data for the month of December and the fourth quarter.

Porter allowed that "it's not going to be great."

"We think growth was just a little bit less than the two per cent annual rate in the fourth quarter and for all of last year would have been just a bit stronger than that," he said.

"The good news is that we will have done better than the US. The bad news is that that's not saying much. It looks like the Canadian economy grew about 2.3 per cent last year."

Traders will also take in the latest reading on U.S. consumer confidence from the Conference Board on Tuesday while Institute for Supply Management releases its index on the U.S. manufacturing sector Thursday.

Canadian banks will be front and centre this week as the quarterly earnings season winds down.

TD Bank (TSX:TD), Royal Bank (TSX:RY) and National Bank (TSX:NA) all report on Thursday and analysts expect all the big Canadian banks will be impacted by the same problem, the squeeze on the bottom line resulting from interest rates at ultra-low levels.

"It's slightly better in Canada than in the U.S. because at least it's one per cent rather than 0.25 per cent," said Gavin Graham, president of Gavin Investment Strategy.

"But if you have rates that low, as they've all been pointing out, it is squeezing their margins."

The other item that will occupy investor attention this week is oil prices and how a continuing runup could threaten the fragile economic recovery in the U.S. and deepen a recession in Europe.

"Energy prices don't matter until they matter," observed Porter, "and it seems like we're back on the verge of the mattering again."

The near-month crude contract on the New York Mercantile Exchange stood at US$109.77 on Friday, up sharply from the US$96 a barrel level where it was at the beginning of the month.

Iran has been widely responsible for the surge in prices amid growing tension over the country's nuclear program and fears global crude supplies could be disrupted. Some analysts expect economic sanctions by the United States and Europe and countermeasures by Iran will help keep crude prices elevated this year.

"I've been saying since the start of the year that Iran is actually a bigger risk to the U.S. economy than Europe, in other words, the rise in oil prices," added Porter.

"Nothing in the last seven weeks has changed my mind on that front."