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Bay Street Likely To Open Higher

The Canadian stock market is likely to open on a positive note on Tuesday amid expectations the two-day high level U.S.-China talks will help resolve the ongoing trade disputes between the two nations. Higher U.S. and Canadian futures and strong cues from Europe also point to a positive opening for the market.

Higher crude oil futures thanks to supply cuts, is another positive for the market.

The government shutdown in the U.S. continues as President Donald Trump has said that he will not sign a budget that does not include funding for the border wall he proposes to build. According to reports, Trump is likely to speak this evening about the shutdown and the border wall.

The market will also be reacting to Canadian trade data and a report on U.S. consumer credit for the month of November. The reports are due at 8:30 AM ET.

On Monday, the benchmark S&P/TSX Composite Index ended up 77.51 points, or 0.54%, at 14,504.13, after scaling a low of 14,383.06 and a high of 14,515.12 in the session.

In company news, the CEO of Bausch Health Companies Inc. (BHC.TO), Joshep Papa said on Monday that he expects the company will double revenue from its seven major products to between US$150 million and US$300 million, driving overall sales growth.

Lucara Diamond Corp. (LUC.TO) expects its 2019 revenue to be between $170 million and $200 million. The company is also predicting an annual dividend of Canadian $0.10 per share, to be paid quarterly.

Asian stocks ended mixed on Tuesday despite optimism over U.S.-China trade talks as U.S. officials held a second day of trade talks with Chinese counterparts in Beijing.

The second day of negotiations coincided with an unannounced visit by North Korean leader Kim Jong Un, with some analysts saying China could use Mr Kim's visit as a bargaining chip in the U.S. trade talks.

European markets were edging higher to hit a three-week high as investors pinned hopes for a trade deal between China and the United States and the Italian government approved a decree aimed at shoring up troubled lender Banca Carige.

On the economic front, Eurozone's economic sentiment decreased more-than-expected in December to its lowest level since the start of 2017, dropping to 107.3 from 109.5 a month earlier. Economists had predicted a score of 108.2.

France's merchandise trade deficit widened sharply in November and was worse than economists' forecast, preliminary figures from the French Customs showed. The visible trade deficit rose to EUR 5.1 billion from EUR 4.1 billion in October. Economists had expected a shortfall of EUR 4.9 billion for November. A year ago, the deficit was EUR 5.96 billion.

Meanwhile, German industrial production decreased for a third straight month in November, defying expectations for an increase, amid a sharp fall in consumer goods and energy output. Data released by the Federal Statistical Office revealed industrial production fell a calendar and seasonally adjusted 1.9% from October, when it decreased 0.8%, revised from 0.5%. Economists had expected a 0.3% increase.

In commodities, crude oil futures for February were gaining $0.60, or 1.25%, at $49.12 a barrel. Traders are closely following news about OPEC-led supply cuts and are awaiting weekly oil reports from the American Petroleum Institute and U.S. Energy Information Administration.

Natural gas futures for February were up $0.028, or 0.95%, at $2.985 per million btu.

Gold futures for February were declining by $5.40, or 0.45%, at $1,284.50 an ounce.

Silver futures for March were down $0.066, or 0.41%, at $15.690 an ounce, while Copper futures were up $0.011, or 0.40%, at $2.648 per pound.

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