Canada’s annual inflation rate checked in at 2.2% in July, down from the 2.6% yearly increase seen in June.

Statistics Canada reported Tuesday that consumer prices edged up 0.1% for the third consecutive month in July, contributing to lowering the 12-month percentage change between July 2002 and July 2003 to 2.2%.

This is the smallest increase since July 2002. The CPI, excluding energy, increased 1.8% from July 2002 to July 2003, after rising 2.2% in June.

Analysts had expected July CPI to come in at 2.3%.

This kind of mediocre economic performance may encourage the Bank of Canada to lower interest rates yet another 25 basis points, say some economists, when it meets again on September 3. The ongoing, adverse impact of the blackout may add to the urgency of that move.

The U.S. Commerce Department reported Tuesday that home-building activity rose more than expected in July, increasing 1.5%.

That’s the fourth straight month of gains, and follows a revised increase of 5.7% in June. The good news has resulted in a positive ripple on Wall Street, where futures trading is up.

In Europe, London’s FTSE-100 is up 3.8 to 4,275.90, following strong results on U.S. markets yesterday. Frankfurt’s DAX index is 24.28 points higher at 3,531.51. In Paris, the CAC40 gained 12.93 points to 3,314.01.

In Asia’s Tuesday trading, Tokyo’s Nikkei took Wall Street’s lead, rising 141.13 points to 10,174.1. In Hong Kong, stocks closed slightly lower, ending a six-session winning streak. The key Hang Seng Index fell 15.75 points to 10,509.29.

Later Tuesday, investors will be anxious to see the University of Michigan’s latest reading on U.S. consumer confidence.

On Monday, technology issues lifted Toronto stocks to a higher close Monday. The S&P/TSX composite index rose 20.78 points to 7,411.33.

The Dow Jones industrial average closed up 90.76 at 9,412.45. The broader market also finished higher. The Nasdaq composite index rose 37.48 to 1,739.49. The S&P 500 index advanced 9.07, or 0.9 percent, to 999.74.