By James Langton

(December 19 – 09:00 ET) – All eyes are on the U.S. Federal Reserve Board today, as it meets to contemplate a change to interest rates.

Consensus suggests that the Fed will move to a neutral policy stance with no change in rates, but some observers are holding out hopes of a rate cut, or at least a move to an easing bias. Either way we should have the answer at 14:15 ET today.

Ahead of the Fed announcement, the U.S. October trade deficit was reported down to US$33.2 as imports and exports of semiconductors and other capital goods declined. The number is in line with expectations.

In Canada, the merchandise trade balance for October came in unchanged as expected, with exports and imports unchanged. This was largely because substantial increases in auto sales were almost entirely offset by declines in energy products exports and industrial goods imports.

Wholesale sales rose 1.2% in October, faster than the 0.5% rebound that was expected. All provinces except New Brunswick reported higher sales.

In Europe, stocks are up after positive earnings news from Solectron. The FTSE is up 35 points to 6,282. The CAC 40 is up 56 points to 5,944. The DAX has gained 50 ticks to 64,40.

In M&A news, Ciena Corp. is buying closely-held Cyras Systems Inc. for about US$2.75 billion in stock and assumed debt.

Diageo plc and Pernod Ricard SA are said to be close to buying Vivendi Universal SA’s Seagram wine and spirits unit for about US$8.2 billion in cash.

Overnight in Asia the markets were mixed again, as Japan continued to face up to its slowing recovery. The Nikkei dropped 351 points to 14,132. The Hang Seng managed to add 164 points to 15,188.

In other news, 360Networks has announced a $230 million deal with Deutsche Telekom to provide Deutsche with North American network capacity and maintenance services.