North American stocks are expected to open lower Tuesday, while Canadian investors weighed the impact of the new federal budget and higher inflation.

Statistics Canada said inflation jumped to 2% in February, up from 1.2% in January thanks to higher gasoline prices in some regions.

The Canadian dollar opened at US85.46¢, up 0.55 of a cent.

South of the border, investor attention focuses on housing data and the start of a two-day Federal Reserve meeting on interest rates.

U.S. construction of new homes rebounded in February after a big decline in the previous month, but building permits slid further. The U.S. Commerce Department reported that construction of new homes and apartments rose by 9% in February to a seasonally adjusted annual rate of 1.525 million units.

Builders’ applications for new permits continued falling in February, dropping by 2.5% to an annual rate of 1.532 million units. That marked the 12th decline in the past 13 months in building permits.

The Fed, which starts its two-day interest-rate setting meeting today, will make an announcement on its latest rate decision on Wednesday.

In M&A news , EGL may climb after investors led by its chief executive offered $1.7 billion, or $38 a share, for the logistics and freight forwarder firm.

In earnings news, Adobe Systems and Oracle unveil quarterly results after the close of trading.

Crude-oil prices rose 26 cents at $56.85 a barrel.

Overseas, Barclays and ABN Amro Holding each rose in European trade, after the banks confirmed they were in merger discussions.

The FTSE 100 was 0.2% lower in London.

In Asia, the benchmark Nikkei 225 index on the Tokyo Stock Exchange rose 153.65 points, or 0.9%, to finish at 17,163.2 points.

Japanese financial markets will be closed Wednesday for Spring Equinox Day, a national holiday.

In Hong Kong, the Hang Seng Index advanced 90.16 points, or 0.5%, to 19,356.9.

North American stocks shot ahead Monday, shaking off the pessimism of recent weeks, as global merger news and optimism about the strength of the global economy had investors piling back into markets.

The S&P/TSX composite index gained 182.06 points, or 1.42%, to 13,011.74.

Nine of the 10 TSX main sub-groups participated in the rally.


The S&P/TSX Venture composite index moved up 10.12 points, or 0.33%, to 3,075.74.

In New York, the Dow Jones industrial average gained 115.76, or 0.96%, to 12,226.17, the Nasdaq gained 21.75, or 0.92%, to 2,394.41, and the S&P500 moved up 15.11, or 1.09%, to 1,402.06.