Investor concern over inflation should dissipate this morning with a report that Canada’s consumer price index fell 0.2% in October. A drop in oil prices is a major contributor to the decline.

The monthly decrease combined with the 0.3% increase from September 2002 to October 2002 contributed to lowering the 12-month increase in the CPI from 2.2% in September to 1.6% in October, the smallest since June 2002.

Other important factors having an impact on the year-to-year increase in CPI include automotive vehicle insurance premiums, natural gas, tuition fees, homeowners’ replacement cost, homeowners’ insurance premiums and restaurant meals. Lower prices for automotive vehicles, electricity, gasoline, clothing, and traveller accommodation exerted downward pressure.

American investors got some good news this morning, too, as the Commerce Department reported on an unexpected jump in home-building activity in October. Housing starts shot up 2.9% to a seasonally adjusted 1.960 million annual rate. That followed an increase of 4.0% in September to a 1.905 million rate.

Asian markets didn’t have the benefit of this morning’s news. The U.S. is planning for quotas on Chinese imports. Concern in Asia about the plan sank stocks on those exchanges.

Tokyo stocks fell to a three-month low, following losses on Wall Street. The Nikkei 225 stock average closed down 282.45 points, or 2.85%, at 9,614.60 points, its lowest close since Aug. 12. Hong Kong shares dropped due to losses in export-oriented shares.

Meanwhile, in Europe the bourses are also down. A sharp slide in the U.S. dollar is prompting European traders to unload shares of major exporters. London’s FTSE100 share index is down 0.7% at 4,326.20. In Paris the CAC40 index has fallen 1.2% to 3,311.19. Frankfurt’s Xetra DAX index has dropped 1.6% to 3,608.63.

Yesterday, in Toronto, the S&P/TSX composite index fell 28.66 points to 7,737.39. Falling financial and energy stocks offset gains in information technology and gold. The Dow Jones industrial average fell 86.67 points to 9,624.16. The Nasdaq composite dropped 27.86 points to 1,881.75. The S&P 500 was off 9.48 points at 1,034.15.