Futures trading is up slightly Tuesday morning indicating a flat to positive opening for today’s equity markets. Investors are waiting for the results of U.S. Federal Reserve’s rate announcement tomorrow.

Fed watchers are split in their predictions. Some are saying we are in for a 25 basis points rate cut. Some foresee a 50% rate cut, due to recent signs that inflation is well under control.

A study released in the U.S. on Friday tied the Fed’s monetary policy statements, which accompany rate announcement, to overall economic confidence. Therefore, most analysts say Fed Governor Alan Greenspan will be keenly aware of the impact of his words tomorrow. Meanwhile, analysts say recent profit-taking shows that the markets are already pricing in a rate cut.

Today, investors will get the U.S. consumer confidence report for June at 10:00 ET.

Overnight in Asia, investors followed the trend of profit-taking on Wall Street. Tokyo’s key index, the Nikkei fell 217.88 points, or 2.38%, to 8,919.29. In Hong Kong, the Hang Seng Index fell 104.94 points, or 1.08%, to 9,629.35.

In Europe, London’s FTSE is down 0.39 per cent at midday to16.8 to 4,071.1. The Paris CAC has fallen 0.32%. Germany’s DAX is off 0.01%.

In business news, Ottawa is telling Canada’s big banks will have to wait until Sept. 30, 2004, to merge. Finance Minister John Manley has opened the door for Canadian banks to possibly merge even with large insurance companies. Though, a change in liberal leadership may change this picture, especially if the banks can’t show a consumer benefit from mergers.

In economic news, Statistics Canada reported that national net worth advanced 1.0% (seasonally adjusted) in the first quarter, compared with a 1.9% gain in the previous quarter.

The slower growth in the first quarter was driven by a significant increase in the net foreign liability — what Canadians owe to non-residents less what non-residents owe to Canadians — which offset the increase in national wealth.

The rise in net foreign debt was related to the appreciation of the Canadian dollar, which had a larger impact on Canada’s foreign currency-denominated assets than on foreign currency-denominated liabilities. In the fourth quarter, strong growth in national net worth was also related to net foreign debt, which had declined sharply.

In a separate release, StatsCan said wholesale operating profits and gross margins fell in 2001, as the sector struggled with a generally weak economic environment both at home and abroad.

Total operating revenues, which had been growing at near double-digit rates over the previous two years, edged up 1.6% to $478.3 billion dollars.