TORONTO - The Toronto stock market was set for a higher open Monday amid mixed manufacturing reports from China and Europe.

Traders also looked ahead to the major economic event of the week — the U.S. Federal Reserve's meeting Wednesday when markets may find out what the central bank intends to do about cutting back on a key area of stimulus.

The Canadian dollar was ahead 0.07 of a cent to 94.45 cents US.

U.S. futures also advanced as investors wait to see if the Fed will start to taper its monthly US$85 billion of bond purchases.

The Dow Jones industrial futures gained 77 points to 15,778, the Nasdaq futures rose 16.7 points to 3,470 and the S&P 500 futures climbed nine points to 1,777.5.

"We reckon it's a coin flip whether the Fed announces reduced asset purchases on Wednesday," said BMO Capital Markets senior economist Michael Gregory. He said if the Fed did start to taper, it would start next month "to the tune of $5-to-$10 billion.

Speculation about Fed intentions has grown considerably over the past couple of weeks in the wake of a series of strong economic data, particularly a solid employment report for last month. Also, a bipartisan committee struck a U.S. congressional budget bill, which would remove the threat of another government shutdown.

Many traders aren't happy to see an end to the asset purchases as they have kept long-term rates low and supported a strong advance on many markets this year, including the Dow industrials which has surged a good 20 per cent.

That hasn't been the case in Toronto where the TSX is heavily weighted in favour of the resource sector. The Toronto market ended last week up about 5.6 per cent higher year to date.

Oil prices rose as data showed that economic activity in the eurozone picked up in December.

The manufacturing Purchasing Managers Index beat expectations, rising to a 31-month high of 52.7 from 51.6 in November. At the same time, the services PMI slipped to a four-month low of 51 from 51.2.

Other data showed that China’s manufacturing sector grew at a slightly slower pace in December, according to a preliminary survey by HSBC. Its flash purchasing managers’ index slowed to a three-month low of 50.5.

However, the reading was still high enough to indicate that China’s economy is continuing to recover since slowing to 7.5 per cent growth in the second quarter.

The January crude contract on the New York Mercantile Exchange gained 71 cents to US$97.31 a barrel.

March copper edged up one cent to US$3.33 a pound while February gold declined $1.30 to US$1,233.30 an ounce.

On the corporate front, The Wall Street Journal reported two high level departures at smartphone maker BlackBerry (TSX:BB). It cites sources as saying BlackBerry’s executive vice president in charge of global sales, Rick Costanzo, will be leaving the company by early next year. And Chris Wormald, who was in charge of BlackBerry's mergers and acquisitions strategy, will reportedly be gone by the end of this month.

American insurer AIG is selling its aircraft leasing business International Lease Finance Corp. to AerCap in a cash-and-stock deal valued at approximately $5.4 billion. American International Group Inc. said that this is the last major sale of one of its non-core assets. AIG received the biggest bailout of the financial crisis five years ago. The insurer has undergone a massive restructuring that cut its size in half as it focused on its core insurance business.

Primero Mining Corp. (TSX:P) has a friendly deal to acquire Brigus Gold Corp. (TSX:BRD) in an all-stock transaction valued at about $220 million. The deal values Brigus shares at 91 cents each _ a 45 per cent premium to the market price _ based on the Primero’s closing price of $5.22 on the Toronto Stock Exchange on Friday.

Panasonic Corp. will assign about 900 patents and patent applications to a new subsidiary of Ottawa-based patent licensing firm Wi-LAN Inc. (TSX:WIN). It didn’t provide an estimate on what the portfolio is worth or financial terms of its arrangement with Panasonic.

European bourses were higher with London's FTSE 100 index ahead 0.88 per cent, Frankfurt's DAX rose 1.49 per cent while the Paris CAC 40 was up 1.04 per cent.

Earlier in Asia, most markets fell as traders sought direction ahead of the Fed meeting.

Tokyo’s Nikkei 225 index slipped 1.6 per cent despite a positive report from Japan’s central bank showing improved business sentiment, the best in six years for large manufacturers.

Seoul’s Kospi inched down 0.09 per cent, Hang Seng dipped 0.56 per cent, Stocks were down almost across the region, including Indonesia, Hong Kong, Taiwan and Singapore.

News from © The Canadian Press, 2013