While North American stock markets awaited to see investor reaction to a speech by U.S. Federal Reserve chairman Ben Bernanke at the German central bank to see if he would indicate whether the Fed would cut its benchmark federal funds rate next week, Canada received two solid indicators on Tuesday that the economy is still strong north of the border.

Canadian Housing Mortgage Corp. reported strong housing starts in August and Statistics Canada reported a new record high for merchandise exports in the month of July.

The seasonally adjusted annual rate of housing starts was 226,500 units in August, up from 215,600 units in July, according to CMHC. This beat economists’ forecasts of 220,000

Meanwhile, Statistics Canada reported that Canadian merchandise imports set a new record high in July in the wake of the appreciation of the Canadian dollar in recent months.

Imports jumped 3.5% to $35.7 billion, from a revised $34.5 billion in June. This second consecutive monthly rise was led by an advance in imports of automotive products.

Canadian companies exported $39.3 billion in July, a 1.4% increase from the revised $38.8 billion in June. Industrial goods and materials as well as automotive products were the driving forces behind this increase.

As a result, Canada’s trade surplus with the world narrowed to $3.7 billion, as imports increased at more than twice the pace of exports.

Similarly, Canada’s trade surplus with the United States contracted to $6.5 billion, with imports increasing at a faster rate than exports.

Both trade surpluses fell to their lowest levels since October 2006.
The Canadian dollar opened at 95.57 cents US Tuesday, up 0.56 of a cent.

Overseas, Asian markets limped through a sluggish day to finish mostly higher, but Britain’s FTSE 100 slipped 1.55%, Germany’s DAX index fell 1.26% and France’s CAC-40 fell 1.45%.

In Japan, the benchmark Nikkei 225 index gained 0.72% to finish at 15,877.67 points on the Tokyo Stock Exchange, snapping a two-day losing streak.

Hong Kong’s Hang Seng Index slipped 0.2% to 23,952.24 points, pulled lower by a plunge in China’s Shanghai market after the mainland government said inflation there hit an 11-year high in August.

Meanwhile, Oil prices steadied Tuesday as markets awaited word from OPEC about whether it would keep its production quotas unchanged following a late rally in the previous session.

Light sweet crude for October delivery fell one cent to US$77.48 a barrel in electronic trading on the New York Mercantile Exchange midday in Europe, after rising earlier as high as $78.32.

On Monday, the S&P/TSX composite index fell 25.72 points to 13,625.49. The TSX Venture Exchange slipped 28.7 points to 2,668.37.

On Wall Street, the Dow Jones industrials edged up 14.47 points to 13,127.85 after falling 250 points Friday on news that the U.S. economy shed 4,000 jobs in August.

The Nasdaq composite index was off 6.59 points to 2,559.11 while the S&P 500 index slipped 1.85 points to 1,451.7.