Unveiling of the Euro Banks Stress Test
Friday, July 23, 2010
, Posted by Usman Ali Minhas at 11:19 AM
The EU wide Stress Test will be released later today. Anticipation is massive with consequences potentially going both ways. As Reuters prints: “Traders have been betting most of the 91 European banks being examined will pass. Analysts say if there are no ugly surprises, that will be euro supportive.”
The other side of that coin is the belief that, other than the exceptional case, the test is not severe enough. The Wall Street Journal reports John Raymond, a credit analyst at CreditSights, as saying: “he doesn't think the markets will get the level of disclosure they want from the tests and that the only cases where regulators have something negative to say will be where there is already a solution in place. “
On the eve of the release the Euro gained over 1% on the greenback and Kathy Lien, Director of Currency Research at GFT explains what can be expected for today's post release: “Not only is this the most anticipated event of the week, but it should single handedly determine whether the EUR/USD will sustain a move above 1.30 or head back towards 1.25.”
