Traders have been in a holding pattern for the past week, and are likely to maintain that position in the coming sessions, as the direction of the European and Chinese economies remain in question.

It has been an optimistic month for stock markets so far, characterized by an enthusiastic climb that defined much of the first-half of September. Stock markets have been trading at levels not seen since late 2007, helped in particular by moves from central banks to provide stimulus.

"You'd think (with) a big spike up, you'd have a fairly sizable smack back down, you haven't," said Colin Cieszynski, market analyst at CMC Markets Canada, who adds that is an encouraging sign in some respects.

"They've gone up to a higher level and just kind of holding there."

The TSX was down less than one per cent last week, closing at 12,383.60 on Friday. The Dow and Nasdaq were both down 0.1 per cent from a week earlier. "There's very strong support for the markets ... it's quite indicative that we're into a new uptrend here," Cieszynski said.

But with little major economic data on the calendar for next week, investors will likely return focus to Europe and whether Spain will tap a new European aid program. Also in focus will be the direction of the Chinese economy after data last week suggested further weakness.

Those uncertainties could play into the direction of commodities prices, particularly crude oil, which has seen its value pressured by concern about further economic weakness overseas.

The price of crude fell six per cent last week alone, bringing it back to levels it hasn't settled at in more than a month.

Canadian commodities will also likely be part of the focus of Bank of Canada governor Mark Carney's speech in Ottawa on Monday, which will also deal with opportunities for trade.

Later in the week, earnings from Research In Motion (TSX:RIM) could put pressure on the information technology sector. The BlackBerry-maker is expected to show that its one-time stronghold on the smartphone market diminished even further in the third quarter, and losses deepened.

On the data front, Canadian retail sales are expected to show broad gains across several categories when they're released on Tuesday.

"July may have actually held some good news for retailers, if the latest gains in household incomes translated into more spending," said CIBC World Markets economist Emanuella Enenajor in a note.

"Above-normal temperatures in Central Canada likely supported retailing activity, particularly in the building materials sector that has been unusually weak lately."

On Friday, Canadian real GDP numbers are expected to show that growth in the third quarter remains weak.

In the U.S., durable goods orders are slated for Thursday, while personal income is due Friday.