This week is judgment week on both sides of the border. But will investors really care?

For Canadian investors, the week ahead, shortened by the Canada Day holiday on Thursday, will be eventful on the political as well as the economic front with the federal election on Monday and real gross domestic product for April on Wednesday.

In the U.S., all eyes will be on the much-anticipated Federal Open Market Committee Wednesday at which the Federal Reserve Board will almost certainly raise interest rates, probably by 25 basis points.

Monday’s federal vote could have ramifications for domestic and international markets, say some economists. With the Liberal and Conservative parties running neck-and-neck in the standings, it’s impossible to say who will come out on top and what political alliances might be formed, possibly leading to new and unknown fiscal policies. Will a minority Tory government, possibly supported by the separatist Bloc Québécois, result in turmoil in financial market turmoil and send the Canadian dollar down?

Derek Burleton, senior economist with TD Bank Financial Group, says the implications of a minority government do not appear to be fully discounted in financial markets. He points to last week’s rallies in the C$ dollar, bond and equity markets. “At issue is the likely difficulty of any of the parties forming a stable government in view of differences in policies,” he says in a report. “In any event, we fully expect any post-election market weakness to be only temporary.”

Others say the election will be a non-event, at least from the markets’ view of things. “The election likely won’t mean much for markets, as a minority outcome makes it implausible that either the full Liberal or Tory platforms can be enacted,” says CIBC World Markets economist Avery Shenfeld.

International markets, however, may not like the uncertainty a minority government brings. Indeed, with the polls as close as they are, overseas investors finally have begun to sit up and watch. “There was zero interest a month ago [in the election campaign] and now there’s significant interest among those foreign investors who are in the Canadian market,” says David Wolf, senior economist with RBC Capital Markets, who deals with international bond holders.

On the domestic economic front, economists expect the strong performance to continue, but not at the pace registered by the 0.7% month-over-month gain in March. “After righting a listing economy with a buoyant March performance, real GDP growth continued to sail forward in April—albeit at a more modest pace,” CIBC’s Warren Lovely says in a report. “A 0.2% monthly GDP increase would edge year-over-year trend growth ever closer to the economy’s 3% non-inflationary potential, a pace it hasn’t enjoyed in over a year.

Burleton is a little more bullish, saying indicators for April point to a gain of 0.4%. That, he says, would put growth on track to register a gain of 4%-4.5% annualized in the second quarter, almost twice the 2.4% first-quarter turnout.

Also out this week in Canada is the Industrial Product Prices Index for May. Look for a big jump there, following last week’s hike in the consumer price index.

In the U.S., a bevy of indicators will provide updated assessments of economic conditions, says Derek Holt assistant chief economist at RBC Financial Group.

Personal income and spending are out on Monday, followed by the Conference Board’s June measure of consumer confidence on Tuesday. Industrial production, the Chicago Fed’s purchasing managers’ index, the NAPM-New York report, weekly mortgage applications, and the weekly ABC News/Money Magazine consumer comfort survey round out the FOMC meeting for a full plate on Wednesday. Thursday brings forward the ISM manufacturing index, construction spending, vehicle sales, and weekly initial jobless claims. On Friday look for updates on employment numbers and factory orders.

None of that will distract from Wednesday’s FOMC meeting. Many investors in both the U.S. and worldwide have been sitting on the sidelines waiting to see how far the Fed will go.

A 25 bps rate hike is a slam-dunk. But economists will be watching for what the Fed says in its accompanying press release and how it compares with the last instalment. “Notably, there is a distinct possibility that the reference to the need to raise interest rates at a “measured” pace (which implies 25-basis-points rather than 50-basis point moves) could be removed, which would likely be interpreted by financial markets as a shift toward a more aggressive stance,” says Burleton.