Current Futures: Dow +55.00, S&P +5.80, NASDAQ +8.75

European equity markets and U.S. futures advanced, ahead of the U.S. GDP report, which is expected to show that the pace of contraction has slowed in the first quarter and the FOMC monetary policy meeting. 

According to expectations, the U.S. economy contracted 4.8% in annualized terms in the first quarter. This comes, as analysts estimate that the main GDP’s components kept falling in the latest three months, including inventories and spending. In the fourth quarter of 2008, the U.S. economy contracted 6.3%, the worst since 1982. If the U.S. economy keeps contracting in the second quarter of 2009, the current slowdown will be the longest since the Great Depression. “Even though the expected number is pretty bad, -4.8% in annualized or -1.2% in nominal terms, markets will probably be positive that the pace of contraction is slowing, if the numbers are as expected” TheLFB-Forex.com Trade Team said. 

In the mean time, the financial markets remain focused on the stress test results. News agencies citing undisclosed sources say that at least six of the 19 largest U.S. banks will require additional capital. “This is somewhat of a double edged sword, since only a hand-full of U.S. banks account for the staggering majority of U.S. financial assets,” TheLFB-Forex.com Trade Team noted. “Since it is almost official that Citibank and Bank of America are part of those six banks, it would not be a big surprise to find out that the other four are actually top banks also, in which case, the six banks that will need more capital may very well be the backbone of the financial system,” they added

Overnight, the Nikkei was closed for business due to the Bank Holiday. The Australian S&P/Asx slipped 13.10 points (0.35%) to 3,695.30. The U.K. Ftse rose 4.33 points (0.11%) to 4,100.73, while the German Dax gained 21.13 points (0.46%) to 4,628.55

Crude oil for May delivery was recently trading at $49.50 per barrel, down $0.45.

Gold for May delivery was recently trading down $2.40 to $891.20.