North American markets are expected to open higher Tuesday continuing yesterday’s advance as investors react to positive news on U.S. consumer prices and construction activity.

U.S. consumer prices were unchanged in May, after falling 0.3% in April, the Labor Department reported early Tuesday. Core prices, which exclude food and energy costs, rose by 0.3% — the biggest gain in 10 months. The strength in prices suggested the risk of deflation may be subsiding.

Separately, the U.S. Commerce Department said housing starts rose by 6.1% in May, after a revised drop of 6.3% in April. Economists had expected an advance of 5.5%. April’s activity had initially been reported as a decline of 6.8%.

Later this morning, the U.S. Federal Reserve will release its measure of industrial production and capacity utilization for May.

North of the border, Statistics Canada reported Tuesday that the value of Canada’s assets abroad, as well as its foreign liabilities, plunged dramatically during the first three months of 2003 in the wake of a surging Canadian dollar, The decline in international assets was four times the decrease in liabilities. As a result, Canada’s net foreign liability rose from a record low of $184.0 billion at the end of 2002 to $210.3 billion.

The value of international assets fell to $949.2 billion, a drop of $34.1 billion from their 2002 year-end level. The dollar, which gained 7% in value in relation to the U.S. dollar from January to March, removed $60.4 billion from the value of these assets, most of which are in U.S. dollars. At the same time, the nation’s international liabilities declined $7.9 billion to $1,159.4 billion. This impact of the strengthening dollar was partly offset by increased activity in international borrowing.

European stocks are higher in midday trading, yesterday’s gains on Wall Street. London’s FTSE 100 index is up 34.3 points to 4,187.2.

In Paris, The CAC40 index is up 27.48 points to 3,201.97, while Frankfurt’s DAX 30 index has gained 39.45 points to 3,303.95.

Asian stocks closed sharply higher Tuesday, boosted by sharp gains Monday night on Wall Street.

Tokyo stocks ended at a six-month high on hopes a U.S. economic upturn could boost Japan’s export-dependent economy. The Nikkei 225 Stock Average climbed 193.17, or 2.19%, to close at 9,033.

Meanwhile, Hong Kong shares closed higher on the back of the sharp gains on Wall Street. The Hang Seng rose 1.7% to finish at 10,030.37.