By James Langton

(June 16 – 09:00 ET) – The Consumer Price Index for May was reported this morning. It’s up 0.5% to a 2.4% annual headline rate. The core rate was up 0.4% in the month and 1.4% on the year. Economists were calling for 2.2% on the headline and a 1.4% core rate, so the headline rate is running a little stronger than expected. Energy prices are being cited as the cause.

The Bank of Canada doesn’t appear to be in a rush to tighten rates. Bank Governor Gordon Theissen gave a speech yesterday which reflected hardly any concern over inflation.

In the U.S., May housing starts were reported at 1.59 million, down 3.9%. Economists were calling for 1.64 million starts, a 2.4% slide. The bigger fall heralds a slowing U.S. economy.

In Europe stocks are mixed at midday. London’s FTSE is up 25 points to 6515. France’s
CAC 40 is off 16 points to 6497. Germany’s DAX has slipped 35 points to 7293.

In M&A news Dresdner Bank AG is said to be in talks with Commerzbank AG. Dresdner’s earlier deal with Deutsche Bank fell apart. The Caisse des Depots et Consignations, France’s second-largest money-manager, is entering the U.S. fund management business by buying Boston’s Nvest LP for US$2.2 billion in cash and debt.

Crude oil prices are sliding on the news that OPEC will boost output for the second time this year.

Markets were mixed in Asia. Japan slid, with the Nikkei closing down 20 points to 16318. The Hang Seng closed on the upside by 354 points to16434.