By James Langton
(March 21 – 09:00 ET) – Traders are bracing for today’s interest rate announcement in the U.S. It’s due around 14:15 ET. Analysts expect a 25 basis point rise, the tone of the policy announcement is the only mystery at this point.
The U.S. reported its trade deficit this morning. It was US$28 billion in January, larger than expected. Imports are up while exports dropped sharply during the month. This number confirms the U.S. Federal Reserve Board hawkish view.
The Canadian trade balance came in at a record $4.53 billion in January, well up from the $2.74 billion balance recorded in December. Also, wholesale sales rose 0.2% from December; inventories also rose 0.2%.
In Europe this morning the anticipation of the rate rise has stocks down across the board. The biggest losses are coming in Internet stocks. This comes despite increased confidence in the European economy, as reported by the latest German business confidence survey. London’s FTSE is down 53 points to 6,572. The French CAC 40 is off 68 points to 6,285. The German DAX has slipped 81 points to 7,791.
In Asia markets were tepid ahead of the U.S. rate announcement. The Nikkei closed up a mere 36 points to 19,602. The Hang Seng index dropped 35 points to 17, 200.
In merger news Nortel Networks Corp. is at it again. The networking giant is acquiring CoreTek, a strategic optical component maker, for up to US$1.43 billion in stock.