This week is likely to see relatively thin range trading ahead of the US and Canadian Labor Day holidays, but nevertheless, Tuesday’s event risk could spark some volatility.

Event risk on Monday will be contained to US housing data, and the release may only exacerbate current risk aversion trends.

Terri Belkas offers a scenario analysis for the Federal Reserve in September and the rest of the year.

The US economic calendar has been remarkably thin this week, leaving the fixed income, forex, and equity markets to trade off of news regarding the liquidity crunch.

The Bank of Japan’s August rate decision is not likely to be a major market mover, though commentary from central bank Governor Toshihiko Fukui could add volatility.

The Federal Reserve has done a complete 180 over the past two weeks, as the central bank has dropped their long held stance that inflation remains their "predominant concern" and instead, has finally turned their focus to the rapidly deteriorating status of the economy and financial markets.

Inflation growth in Canada is expected to slow during the month of July, with the Bank of Canada’s core CPI measure estimated to have fallen back to an annualized rate of 2.3 percent from 2.5 percent.

Inflation growth in the Euro-zone is expected to slow during the month of July, with CPI estimated to have fallen 0.2 percent from the month prior, while the annualized rate is expected to hold steady at 1.8 percent.

Inflation growth in the US is expected to slow during the month of July, with the annualized headline CPI figure estimated to drop to a four month low of 2.4 percent, while the annualized core measure is anticipated to hold steady at a 15-month low of 2.2 percent.

It was only a week ago that the FOMC statement signaled that the Federal Reserve remained hawkish, but the recent liquidity crunch has forced the bank to add billions of dollars into the money markets.