The Bank of Canada has taken a cautious approach and is standing pat on interest rates. The overnight rate will remain at 2.75%.

There has been some pressure on the central bank to lower rates to bring down the Canadian dollar. Its unexpected rise against the declining American dollar has been hurting exports, especially auto exports. But the Bank’s accompanying monetary statement shows that the central bank doesn’t plan to lower rates in the near future. It seems more worried about reaching full capacity and consumer spending than Canada’s export trade.

Weak manufacturing numbers in Canada and lower than expected retail sales in the U.S., should be absorbed by the markets. The former were low because of the Ontario blackout, and the latter, while weaker than expected, still show that the American consumer is active.

Canadian manufacturers’ shipments fell 4.5% to $40.9 billion, in August, says Statistics Canada. That’s the lowest level since December 2001. The aftermath of the electrical blackout in mid-August, which cloaked much of Ontario in darkness, was one of several factors contributing to the decline. Shipments in Ontario plunged 7.8% to $21.2 billion in August.

Ontario led the six provinces reporting lower shipments in August. Excluding the significant influence of Ontario from the Canada total, manufacturing shipments decreased 0.8%. Quebec manufacturers posted a 2.6% drop in August, the first since May. The transportation equipment and primary metals industries contributed to the decrease. Retail sales fell for the first time in five months in September, driven down by a drop-off in the auto sector.

In the U.S., retail sales declined 0.2% in September, says the Commerce Department. However; the final report on August sales shows an advance of 1.2% instead of the 0.6% previously estimated. Sales were pushed down by a 1.6% drop in sales at motor-vehicles and parts dealers. Excluding that category, sales would have gone up by 0.3%. Excluding gasoline as well, sales would have increased by 0.2

Wall Street futures are indicating a positive start for equity markets. Tech stocks are likely to lead the way due to news from two bellwether companies. After markets closed yesterday, Intel reported record shipments of microprocessors and a profit of US$1.7 billion. That’s an increase of $686 million a year ago. Revenue rose to $7.8 billion from $6.5 billion.

The big business news in Canada came from chipmaker Celestica, which has announced a takeover of almost US$250 million in stock for Manufacturers’ Services Ltd.

In Tokyo, the Nikkei Stock Average of 225 issues dropped 66.48 points, or 0.61%, to 10,899.95, following losses among the stocks of major banks, high-techs and exporters.

In Hong Kong, the Hang Seng Index climbed 200.16 points, or 1.7%, to 12,056.18 — the first time above the 12,000-point mark since August 2001, after strong gains in property and banking companies.

On Tuesday, the S&P/TSX composite index up 115.81 points to 7,749.42, powered by the big banks. The TSX Venture Exchange advanced 8.53 points to 1,429.89. In New York, the Dow industrials moved up 48.6 points to 9,812.98, the Nasdaq composite was up 9.66 at 1,943.19 and the S&P 500 index added 4.13 points to 1,049.48.