Three major central banks are meeting this week to make rate decisions, the most important being the U.S. Federal Reserve, which is expected to drop the main bank rate by 25 basis points.

Investors are in cautious mode ahead of the Fed meeting on Wednesday. The equity markets look set to open flat on Monday. South of the border, Wall Street futures trading is sluggish.

Meanwhile, the Canadian dollar is continuing to slip from its perch. It’s off this morning 0.33 of a cent to US73.20¢.

The European Central Bank and Japanese Central Bank are also meeting mid-week. The last time the ECB met it dropped rates by 50 basis points.

In Tokyo, stocks closed higher during Monday trading for a fifth straight session. The Nikkei gained 16.75 points, or 0.18%, closing at 9,137.14. Technology heavyweights erased morning losses as foreign investors targeted Nippon Steel and Mitsubishi Heavy Industries.

In Europe, markets are down. London’s FTSE is off 0.54% at midday. Paris CAC has fallen 0.74%. The German DAX has slipped 0.2%.

In economic news, Statistics Canada reported Monday that retail sales suffered a second consecutive monthly decline in April. Sales fell 0.9% in April and 0.8% in March, wiping out the 1.8% gain made in February. These declines translate into spending of $26.1 billion in retail stores at in April, pretty much the same level as in January.

Analysts are blaming the slump on price-induced declines at gas stations and SARS. Otherwise, says StasCan,retail sales would have remained essentially unchanged in April.

Sales decreases in April were reported by retailers in the automotive (-2.6%), clothing (-0.9%) and furniture (-0.4%) sectors; sales remained essentially unchanged in the general merchandise (-0.1%), drug (+0.1%) and other retail (0.0%) sectors such as liquor, sporting goods, hardware and bookstores. Retailers in the food sector enjoyed the only sales gain (+0.8%) in April.

In business news, Geac Computer has announced that it will buy U.S. software company Comshare for US$52 million. It says it is planning to broaden its portfolio of business software.

A $200 million merger deal is in the works between Canadian plastics and chemical companies Acetex Corp. and AT Plastics Inc.

Finally, on the earnings front, Alliance Atlantis Communications has posted a loss of $18.8 million for its fiscal 2003 year, compared to a year-earlier profit of $27.5 million.