Economic data released Friday on both sides of the border has economists asking whether central banks should be doing more to prevent deflation.

Statistics Canada is reporting that the country’s trade surplus with the rest of the world fell in April. That’s the fourth time in six months.

It was the largest decline in merchandise exports in more than two years and was almost entirely due to energy. As a result, Canada’s trade surplus with the rest of the world fell from $5.3 billion in March to $4.1 billion in April, the lowest level since December 2002. The $1.2 billion decline in the trade surplus was the largest since June 2002.

Canadian manufacturing also took a hit in April, says StatsCan. Widespread decreases in manufacturing activity contributed to a 3.4% decline in shipments to $43 billion. Inventories continued to edge up, while manufacturers reported an eighth consecutive decline in unfilled orders. As a result, the inventory-to-shipment ratio, a barometer measuring manufacturers’ abilities to clear their inventories, hit 1.49 in April from 1.43 in March, the highest level since December 2001.

In the U.S., the Labor Department is reporting that wholesale prices fell for a second consecutive month in May amid a drop in oil prices after the war in Iraq. The producer-price index for finished goods slipped 0.3%, well below the 1.9% drop in April. The so-called core index, which excludes volatile food and energy items, rose 0.1%.

The American trade gap with the rest of the world narrowed in April due to a increase in the volume of oil imports offset lower energy prices. The deficit in international trade in goods and services narrowed to $42.03 billion in March, says the U.S. Commerce Department. Economists had expected producer prices to slip 0.2% in May and the trade deficit to narrow to $41.8 billion in April.

Despite these negative numbers, the equities markets are expected to open slightly positive. Wall Street futures trading is positive. Investors are waiting for the lastest indication of consumer sentiment which is due out at 09:45.

In Europe stocks are mixed. In Paris, the CAC 40 is down 7.53 points, or 0.2%, to 3,144.63. But London’s FTSE 100 index has edged up 5.8 points, or 0.1%, to 4,167.1 Frankfurt’s DAX 30 index is also up. It has added 2.56 points, or 0.1%, higher to 3,222.03.

Asian stocks closed higher in Friday trading. In Tokyo, the Nikkei Stock Average climbed 62.04 points, or 0.7%, to close at 8,980.64 — its highest close since Dec. 4, 2002.

Hong Kong’s blue-chip Hang Seng index ended above 9800 for the first time in five months on hopes that the World Health Organization will soon lift a travel advisory against China. The index rose 118.80 points, or 1.2%, at 9,855.64.