Current Futures: Dow +1.00, S&P -0.50, NASDAQ -0.25

European equity markets opened higher, continuing the movement started in the Asian session. However, U.S. futures declined during the late Asian session and are currently trading near the breakeven line.

A weaker yen, which touched a 5-month low during tonight’s session, boosted Asian markets. Analysts, upgrading the outlook on a number of shares, also helped equities. Pressure on the BOJ is materializing, as the Japanese yen is resuming its downward path.

European markets opened relatively strong. All the major European indexes opened higher, including the Italian stock market despite the country being struck by a 6.3 magnitude earthquake on Monday morning. The main gainers in the European markets continue to be the financials, helped by a successful public offering made by HSBC, and the commodity stocks, as raw materials see their price getting higher on rumors the economy will rebound.

The U.K. economy might be in a much weaker state than the government has forecasted over the last few months. The Financial Times reports that Alistair Darling is preparing to acknowledge a rather huge forecasting error made by the government, cutting the outlook for 2009 to -3.0%, while projecting a whopping 10% budget deficit. Trade Team agrees that the timing to admit such an error may be a huge mistake. Over the last few weeks, the U.K. government has backed away from a second stimulus bill, while the Treasury failed its first gilt sale at auction in more than 7 years they said. If the U.K. government does actually announce such a huge deficit of 10%, it will put additional pressure on the government’s ability to borrow, since the events of the last few weeks point to a marketable weakening of the public finances. Additionally, the pound may suffer because investors will demand higher yields, forcing the central bank to print more money. As a note, the European Union has a 3% limit allowed for the fiscal budget deficit, while anything above this level triggers the excessive deficit procedure.

Overnight, the Nikkei rose 108.09 points (1.24%) to 8,857.93. The Australian S&P/Asx gained 21.00 points (0.56%) to 3,756.60. The U.K. Ftse rose 50.98 points (1.27%) to 4,080.65, while the German Dax gained 56.99 points (1.30%) to 4,441.98

Crude oil gained $0.60 to 53.10, extending the gains seen in the last few days of trading.

Gold is being sold on positive equity markets. Bullion for immediate delivery fell $18.50 to $878.80.