North American markets are likely to rise at the open Wednesday, as investors await news from the U.S. Federal Reserve on interest rates.

The U.S. central bank is widely expected to raise its target rate for overnight interbank loans by a 25 basis points to 2%.

In this morning’s economic news, the U.S. trade gap narrowed more than expected in September amid strong exports and weaker U.S. demand for foreign oil.

The Commerce Department said today the deficit in international trade of goods and services fell to US$51.56 billion in September from US$53.55 billion in August.. Economists had forecast a deficit of US$53.50 billion.

Meanwhile, the U.S. Labor Department said overall import prices rose 1.5% last month, three times the rate in September, reflecting a 12% surge in petroleum prices. Economists had expected a 1.2% increase in overall import prices.

In a separate release, the department said U.S. initial jobless claims rose slightly last week.

Here at home, the trade news wasn’t encouraging. Statistics Canada said the country’s merchandise trade surplus fell September as exports declined. Companies exported $36.1 billion worth of merchandise, a 3.4% decline from August, StatsCan said.

“Exports fell to the United States, Japan, European Union and in every major commodity group, predominantly machinery and equipment and agriculture,” the agency said. As a result, the merchandise trade surplus fell by $1.4 billion to $5.1 billion.

Canadian markets, fueled by a competing bid for Stelco Inc., finished ahead on the day, while U.S. markets were mostly unchanged in listless trading as they waited for the U.S. Federal Reserve’s next move on interest rates.

At close, the S&P/TSX composite index was up 19.43 points or 0.22% to 8,845.16, after dipping to 8,798 at midday, while the S&P/TSX Venture composite index advanced 3.78 points or 0.23%.

In New York, the Dow Jones industrial average slipped 4.94 points or 0.05% to 10,386.37. The tech-heavy Nasdaq composite index gained 4.08 points or 0.2% to 2,043.33, while the S&P 500 lost 0.81 of a point to 1,164.08.

The Canadian dollar lost 0.33 of a cent to finish at US83.42¢.

In Toronto, shares of Stelco jumped more than 20% to after OAO Severtstal, a Russian steel company, on Tuesday put forward an offer to buy the Hamilton steelmaker currently restructuring under creditor protection. It’s believed there are several competing offers for the steelmaker, including an expected $200-million equity rights offering backed by Germany’s Deutsche Bank, a major Stelco bondholder. Stelco’s board met Tuesday to examine those and other potential bids. More than 16.3 million shares of Stelco traded hands, with the stock closing up 25¢ to $1.47.

In New York, Marsh & McLennan was down 56¢ at US$26.80 after the company posted disappointing quarterly results and said it would cut 3,000 jobs, or about 5% of its work force, amid the continuing fallout over charges of insurance bid-rigging by New York Attorney General Eliot Spitzer.