Source: The Canadian Press

The Toronto stock market appeared set to open higher Friday after a report that inflationary pressures eased considerably last month and cast doubt on expectations that Canada’s central bank will act soon to raise interest rates.

Statistics Canada said the country’s national inflation rate slipped by two-tenths of a point to 1.4%, and the closely watched Bank of Canada core rate fell even further — by four-tenths of a point to 1.7% in March.

The Bank of Canada signalled earlier this week that the economy is recovering faster than predicted, and hinted it could raise its key lending rate as early as June 1.

However, since bank’s main goal is to keep inflation within a target range, the March consumer price index numbers could cause Canada’s central bank to defer raising rates until later in the summer.

This is good news for stock investors, since higher rates tend to slow the pace of economic growth and for borrowers. But keeping low interest rates would be less helpful for retired people, who might benefit in the short run from higher interest on their investments – although inflation would offset that in the long run.

The inflation report sent the dollar below parity with the greenback, falling 0.49 cent to 99.51 cents US.

In another piece of bright economic news for stock investors, StatsCan reported Friday that retail sales increased for a third straight month in February, rising 0.5% to $36 billion.

Commodity prices edged downwards in early trading Friday and could put some pressure on commodity stocks. The June crude contract on the New York Mercantile Exchange lost 19 cents to US$83.51 a barrel, while the June bullion contract slipped 70 cents to US$1,142.20.

The May copper contract on the Nymex added 0.2 cent to US$3.49 per pound.

In New York, stock futures were higher as concerns about Greece’s ongoing debt problems eased. This offset news that new orders for big-ticket manufactured goods dropped sharply last month due to a plunge in demand for commercial aircraft.

However, excluding the volatile transportation category, orders rose by 2.8%, the most since the recession began.

Ahead of the opening bell, Dow Jones industrial average futures rose 16 points, or 0.1%, to 11,084. S&P 500 futures rose 3.10 points, or 0.3%, to 1,204.80, while Nasdaq futures rose 1.75 points, or 0.1%, to 2,038.00.

European markets rallied sharply after Greek officials said they would make a formal request to tap a rescue package from the 15 other countries that use the euro and the International Monetary Fund. The debt-burdened country will have access to about US$53.37 billion.

Overseas, Britain’s FTSE 100 rose 0.9%, Germany’s DAX index gained 1.3%, and France’s CAC-40 rose 0.6%. Japan’s Nikkei stock average fell 0.3%.