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Canada's main stock index opened higher on Wednesday, despite a sharp drop in shares of Bombardier Inc after it was hit by steep U.S. anti-subsidy duties, as financial and energy stocks gained.

The Toronto Stock Exchange's S&P/TSX composite index was up 33.09 points, or 0.21 per cent, at 15,507.21 shortly after the open. Bombardier fell 10 per cent.

Bombardier shares were down 8.8 per cent to $2.07 in early trading.

U.S. stocks opened higher on Wednesday as investors awaited President Donald Trump's administration to outline his new tax plan.

The Dow Jones Industrial Average rose 63.25 points, or 0.28 per cent, to 22,347.57. The S&P 500 gained 8.24 points, or 0.33 per cent, to 2,505.08. The Nasdaq Composite added 34.16 points, or 0.54 per cent, to 6,414.32.

Mr. Trump will call for slashing tax rates on businesses and the wealthy as part of the new plan, which, if passed, would be his first significant legislative win since taking office in January.

"The market really would like to see something positive done. And, right now, tax reform is the only positive thing out there," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.

"If they manage to get through to a revenue neutral plan, that is going to be received positively, it will make it that much easier to pass."

U.S. stocks have rallied since Mr. Trump's presidential victory last year mainly on hopes of lower taxes, higher infrastructure spending and looser regulation.

The dollar rose to a one-month high against a basket of currencies on rising expectations of a third interest rate hike this year following comments from Federal Reserve Chair Janet Yellen.

Ms. Yellen said on Tuesday that it would be "imprudent" to keep rates on hold until U.S. inflation hit the 2-per-cent target.

Traders now see an 81.4-per-cent chance of a December rate hike, compared with 71.4 per cent a week ago, according to CME Group's FedWatch tool.

Shares of major banks including Bank of America, JPMorgan and Goldman Sachs were up.

Commerce Department data showed new orders for key U.S.-made capital goods increased more than expected in August and shipments maintained their upward trend, pointing to underlying strength in the economy despite an anticipated drag to growth from Hurricanes Harvey and Irma.

Non-defenve capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 0.9 per cent last month. Economists polled by Reuters had forecast orders increasing 0.3 per cent.

"Federal Reserve chief Janet Yellen made it clear that she wasn't in favour of moving on rates too gradually in comments that were interpreted as a signal that we could well see another rate hike in December," CMC chief market analyst Michael Hewson said. " She did caveat her remarks by saying that policy makers were puzzled as to why inflation was as low as it was, but was confident that it would return to its 2% target level in due course."

In this country, central bank news will also be in the spotlight as Mr. Poloz delivers a speech just before noon (ET) and takes questions afterward. Recently, the bank struck a slightly more dovish tone when officials said the recent rise in the Canadian dollar would be among the factors considered when it comes to future rate hikes in this country. The central bank has already raised rates twice this summer, the most recent catching the markets by surprise and sparking debate about how clearly the bank signals its policy intentions.

Despite the bad news for Bombardier, Desjardins analyst Benoit Poirier said Wednesday that company is still bullish on Bombardier stock, citing future potential for the C Series jets.

"Although we are disappointed by both decisions announced yesterday and are patiently awaiting the final determination, we maintain our bullish stance on BBD," he said. " We remain confident in the company's ability to secure new C Series orders by year-end and see strong potential for the C Series outside of the US market (China and Europe)."

RBC Dominion Securties analyst Walter Spracklin noted that Tuesday's announcement represented a preliminary assessment with a determination of whether duty is warranted not being expected until next year. A hearing is set for Oct. 4, he added, to announce preliminary findings on whether Bombardier "dumped"  its productions. However, that still won't conclude whether Bombardier's deliveries to Detal will be subject to import duties.

"We believe the key area of concern will be what Delta does with its order following the final ruling if in fact it is ruled that Boeing

was damaged and the duty upheld," he said in a note.

"Moreover, the impact on other U.S.-based airlines will also be in question under such a ruling.

Ultimately, he said, it will be the final determination that will be a key catalyst to assessing Bombardier's potential to sell C Series jets into the U.S. market. "However, we expect that in the interim period the issue will be an overhang on the shares."

In Britain, the blue-chip FTSE 100 edged up 0.44 per cent. Germany's DAX was 0.52 per cent higher and France's CAC 40 rose 0.34 per cent.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan was up modestly after four straight days of losses. Japan's Nikkei finished down 0.31 per cent. Hong Kong's Hang Seng added 0.47 per cent and the Shanghai composite index rose 0.06 per cent.

Commodities

Brent and West Texas Intermediate prices were mixed early on although near recent highs ahead of the latest reading on U.S. oil inventories. Turkey's threats to cut oil exports from the Kurdistan region in northern Iraq pushed Brent near $60 (U.S.) a barrel for the first time since mid 2015. Brent is on track to rise by 22 per cent in the third quarter of the year. For WTI, the day's range was $51.67 to $52.34.

"Oil will be front and centre today as EIA inventories provide their weekly dose of volatility," IG analyst Chris Beauchamp. "The situation in Kurdistan has given oil bulls the chance they were looking for, and so far they have picked up the ball and run with it; OPEC should feel aggrieved, since the Kurds have managed to do more for oil producers than all the jawboning of the past year about supply cuts."

Analysts are expecting U.S. inventories to have risen by about 2.9 million barrels last week. Figures released Tuesday by the American Petroleum Institute indicated a decline in U.S. crude stocks of 761,000 barrels last week as refineries boosted production. The market had expected the API figures to show a fourth straight week of rising inventories.

Gold prices, meanwhile, slid overnight as the U.S. dollar rose on increased expectations that the Fed will continue to hike rates and concern over tensions on the Korean peninsula eased.

In early going, spot gold was lower after losing 1.3 per cent Tuesday. U.S. gold futures were also lower.

"Gold slipped below the $1,300 mark as the knee-jerk reaction to the North Korean jitters waned," LG senior market analyst Ipek Ozkardeskaya. "The decline could extend to $1,282...The price rallies could be interesting opportunities for top-sellers."

Silver prices were higher early on after posting the biggest single-day decline since mid-August on Tuesday. Copper prices were higher in London after five days of losses.

Currencies and bonds

The Canadian dollar was lower ahead of Mr. Poloz's remarks as its U.S. counterpart caught an uplift on rising market expectations that U.S. rates will rise by December. The day range on the loonie so far is 80.56 cents (U.S.) to 81.02 cents.

Mr. Poloz is set to deliver a speech at the St. John's Board of Trade around noon (ET). The remarks will be Mr. Poloz's first since the bank surprised the markets with a rate hike earlier this month.

"Recall that Deputy Governor Lane already began working on dampening hawkish expectations somewhat last week, saying that Bank will be watching the Canadian dollar closely and 'taking that into account pretty strongly in making our decisions,'" BMO economist  Robert Kavcic said in a note. "We continue to see the Bank of Canada taking a pause here to assess the impact of recent tightening, with rate hikes resuming in January — this week's speech could serve to reinforce that call."

In other currencies, the euro touched its lowest level in a month against the greenback on a stronger U.S. dollar and the lingering impact of uncertainty in the wake of the weekend election in Germany. Reuters notes that the euro, having gained more than 14 per cent this year, the currency has given back nearly 3 per cent since its January peak.

The U.S. dollar index, which weighs the greenback against a basket of currencies, was higher early on after seeing fairly consistent gains overnight. The day's range on the index is 93.005 to 93.502. In the wake of Ms. Yellen's comments, the markets are now pricing in a more than 70-per-cent chance of another U.S. rate hike by December. On Wednesday, traders will turn their attention  to the announcement of a new tax plan by the Trump administration. Mr. Trump said Tuesday that he wants bipartisan co-operation on tax reform.

Mr. Trump is scheduled to speak on the plan later Wednesday afternoon.

In bonds, U.S. Treasurys were lower on Ms. Yellen's hawkish tone. The yield on the U.S. 10-year note was higher at 2.289 per cent. The yield on the 30-year note was also higher at 2.829 per cent.

Stocks set to see action

British Prime Minister Theresa May has expressed bitter disappointment at the U.S. government's decision to slap hefty duties on Bombardier's C Series jets, a move that threatens thousands of jobs in Northern Ireland, The Globe's Paul Waldie reports.  "Bitterly disappointed by initial Bombardier ruling," Ms. May's office said in a brief statement posted on Twitter Wednesday morning. "The government will continue to work with the company to protect vital jobs for Northern Ireland."

Nike slipped  2.9 per cent in premarket trading after the company posted its slowest quarterly sales growth in nearly seven years and said it expected a further drop in revenue from North America.

Micron Technology jumped 5.7 per cent in premarket trading after the company reported a better-than-expected profit and forecast results above estimates.

Drug developer Axovant Sciences Ltd. said it would stop testing its lead drug in Alzheimer's after it failed to meet the main goals of a late-stage trial, underlining the challenges in developing treatments for the memory-robbing disease. Axovant's once-daily oral drug, intepirdine, belongs to a class of drugs called 5-HT6 antagonist, which works by blocking the 5-HT6 receptor to help release acetylcholine, a neurotransmitter needed for normal cognition. The company's shares lost three-quarters of their value on Tuesday, falling 73.9 per cent. It rose 5.2 per cent in premarket trading Wednesday.

The French government said on Wednesday that combining the rail operations of Germany's Siemens AG with Alstom would preserve "strategic interests" amid fears over job cuts. The agreement is an industrial win for French President Emmanuel Macron, who on Tuesday proposed sweeping reforms for Europe, including deeper trade cooperation. But Macron's political opponents have accused him of selling off another strategic asset and unions fretted about jobs.

Nestlé set a profit margin target for the first time, responding to an industry slowdown and pressure from activist investor Third Point for greater near-term returns from the world's largest packaged food company. Shares in Nestlé rose 1.8 per cent on Tuesday as the market applauded a plan shareholders said struck a balance between profit and growth, while allowing the Swiss company to invest in an uncertain future in which smaller brands are able to gain scale quickly and more shopping gets done online. Investors were looking for Nestlé's new chief executive Mark Schneider to demonstrate that it has a strong strategy to improve performance following four years of missing sales targets as the food sector's growth cools.

Twitter Inc. said late Tuesday that it was testing a 280 character limit for tweets, double the current 140 character limit. Its share were up 1.8 per cent in premarket trading.

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Economic News

New orders for key U.S.-made capital goods increased more than expected in August and shipments maintained their upward trend, pointing to underlying strength in the economy despite an anticipated drag to growth from Hurricanes Harvey and Irma, Reuters reports.  The Commerce Department said on Wednesday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 0.9 percent last month after an upwardly revised 1.1-per-cent gain in July. Economists polled by Reuters had forecast orders of these so-called core capital goods increasing 0.3 per cent last month after a previously reported 1.0 per cent jump in July. Core capital goods orders surged 3.3 per cent year-on-year.


(10 a.m. ET) U.S. pending home sales for August are released. The consensus expectation is a decline of 0.5 per cent from the previous month.


(10:30 a.m. ET) EIA Petroleum Status Report is released.


(11:45 a.m. ET) Bank of Canada Governor Stephen Poloz speaks to the St. John's Board of Trade. A press conference will follow at 12:55 p.m..

With files from Reuters and Bloomberg