Equities markets should react positively to a slew of good economic news south of the border.

The U.S. Labor Department is reporting that consumer prices fell for the first time in seven months in November. The CPI dropped 0.2%, after holding steady in October, the Labor Department reported Tuesday.

The “core” index, which excludes food and energy prices, declined for the first time in 21 years. Economists had expected the overall index to remain unchanged, and for the core index to climb 0.1%.

In a separate release, the U.S. Commerce Department says the housing sector shows no signs of slowing. Housing starts rose 4.5% to 2.070 million annual rate in November. The last time home-building activity past the 2 million mark was in February 1984. Starts rose a revised 2.5% in October to a 1.980 million rate. Economists had expected a 3.1% drop.

The Commerce Department is also reporting that the U.S. trade gap narrowed to $135 billion in the third quarter, from $139.4 billion in the second quarter. Economists had expected a shortfall of $136.2 billion.

A report on U.S. capacity utilization is expected later this morning.

The economic news in Canada, today, isn’t quite as good. The climbing Canadian dollar against the weakening U.S. dollar has hurt manufacturing shipments, which decreased 1.1% to $42.5 billion in October, according to Statistics Canada. “Manufacturers managed to reduce inventories (-0.6%) for the sixth consecutive month, but failed to fill their books with new orders (-3.2%),” says StatsCan. October’s decrease in shipments was broadly based, spanning 15 of 21 industries, accounting for 71% of total shipments.

Meanwhile, markets in Asia fell on Tuesday. Tokyo’s Nikkei average dropped 219.17 points, 2.1%, to 10,271.60. In Hong Kong, the Hang Seng Index fell 259.84 points or 2.1% to 12,260.33.

In London at midday the FTSE 100 index has slid slightly, down 5.7 points to 4,342.3. The Frankfurt DAX has dropped 0.8%, while the Paris CAC40 is down 0.6%.

These drops follow drops on the markets yesterday, despite the jubilation over Saddam Hussein’s capture. On Monday, the Toronto stock market closed with a loss of 47.09 points at 7,932.11. The Dow Jones industrial average fell 19.34 points to 10,022.82. The Nasdaq composite fell 30.74 to 1,918.26, and the S&P 500 slid 6.10 to 1,068.04.