By James Langton

(June 14 – 09:00 ET) – The U.S. Consumer Price Index came in at 0.1% for May this morning, and 0.2% on the core rate. Consensus expectations were about 0.2% for both the headline and core rates, with estimates ranging from 0.1% to 0.4%. The benign inflation numbers should buoy traders’ belief that rate hikes are near an end.

While the market was keen for the CPI it is also looking for several interest rate signals from assorted Federal Reserve Bank presidents who are on the luncheon circuit today. Also at 14:00 ET the U.S. Federal Reserve Board releases its Beige Book which may include some rate clues, too.

There are no major data releases in Canada today, or this week for that matter. Although Statistics Canada did report that the number of new motor vehicles sold dropped by 1.1% from March, the third decline in the first four months of the year.

In Europe the action is mixed, with telecoms and drugs leading the upside. London’s FTSE is up 57 points to 6504. France’s CAC 40 is off a couple of points to 6530. Germany’s DAX has added 23 points to 7292.

The big M&A news of the day has French media giant Vivendi SA and its TV unit Canal Plus in “advanced talks” to buy Seagram Co. for more than US$70 a share, a US$30 billion stock swap. The combined firm would have a market capitalization of more than US$100 billion and combined revenues of US$65 billion a year. Neither firm is commenting on the rumour although Seagram has confirmed the existence of talks.

Interbrew NV, the Belgian brewer, will buy Bass PLC’s brewing unit for about US$3.5 billion.

Nortel Networks is buying EPiCON Inc. for US$275 million in stock. EPiCON has developed software that enables application service providers to manage software on thousands of desktops from a central server.

In the wake of yesterday’s financial services reform bill Quebec Finance Minister Bernard Landry is hinting that the provincially-owned Caisse de depot et placement and Societe generale de financement could boost their ownership of National Bank. Under the proposed rules a single shareholder can own up to 65% of mid-sized banks.

Markets were mixed in Asia overnight. Japan slid, with the Nikkei closing down 260 points to 16654. The Hang Seng closed up by 164 points to 15857.

Certicom Corp. has announced a two-for-one stock split. The firm reported a fourth-quarter loss of 38¢ a share, excluding non-cash charges.