Market fundamentals are being completely overshadowed by the beat of war drums. U.S. President George W. Bush’s announcement of a 48-hour deadline for Saddam Hussein to surrender, has spurred equities markets the world-over.

Futures trading is up Tuesday, pointing to another positive day for equities.

Overseas, Tokyo’s Nikkei Stock Average gained 82.82 points overnight to 7,954.46. Hong Kong stocks rebounded sharply following Bush’s speech. The Hang Seng Index rose 237.35 points to 9,041.51.

European markets are up at midday. Frankfurt’s DAX index jumped 5.4% in early action, London’s FTSE 100 has risen 2.22%. Paris’s CAC 40 has gained 2.23%.

There’s some good news from Statistics Canada today. It’s reporting that manufacturers began the year with a strong performance. Shipments rose in January, up 3.7% to $44.7 billion. New orders jumped 2.9% and inventories fell 0.2%.

January’s increase in shipments, which resulted in the highest monthly output in two years, followed consecutive declines in November (-1.4%) and December (-1.0%).

A strong rebound by the motor vehicle and parts industries contributed to January’s rise. Several motor vehicle manufacturers returned to higher production levels in January following extended shutdowns at some assembly plants in the previous two months.

In other economic news, StatsCan says foreign holdings of Canadian securities fell by $3.1 billion in January, as heavy retirements of foreign-held Canadian bonds dominated portfolio transactions for a second straight month.

South of the border, the euphoria over the apparent certainty provided by Bush’s announcement, will minimize the impact of the latest number on new housing starts. It came in a 1.6 million. That’s less than the expected 1.7 million, and a drop from 1.82 million in December.

The U.S. Federal Reserve is set to announce its latest rate announcement. The Street consensus seems to be that the Fed will maintain the status quo and inidcate possible drops in the future

Meanwhile, Bank of Canada Governor, David Dodge, told a meeting of Italian bankers, earlier today, that rates should continue to rise.