Eur/usd - page 178
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
The EUR / USD has not been as active as it had used in the past weeks.
Known today were the sales of new housing in the United States in September with values 0,467M to stay above the previous value of 0,466M but below 0,470M representing the market consensus.
Leaked document shows 25 banks failed ECB safety tests
Twenty-five of the 130 banks have failed the comprehensive assessment of their financial health, according to reports
Almost one in five of the eurozone’s biggest banks have failed the European Central Bank (ECB)’s comprehensive test of their financial safety, according to leaked documents.
Twenty-five of the 130 lenders being assessed by the ECB have reportedly failed the stress tests, the biggest-ever single review of the single currency’s major banks.
Both the ECB and European Banking Authority (EBA) will release the results of its stress tests at 11am on Sunday. The two bodies’ assessments, which model scenarios such as downturns in the housing market, a new recession and a spike in borrowing costs, cover similar ground but have important differences.
The ECB is conducting an additional review of eurozone banks’ assets ahead of it taking over as the primary regulator of banks that use the single currency; the EBA’s tests also cover European banks that are not part of the euro, including British ones.
According to a draft memo of the results seen by Bloomberg, only 10 of the 25 banks to fail the tests will be told to plug capital shortfalls. The tests cover the banks’ positions at the end of last year, and the remaining 15 to fail the tests are reportedly judged to have raised the equity to meet the shortfall since then.
“The ECB can’t comment on speculation about the outcome of the comprehensive assessment,” the central bank said. Lenders in Ireland, Italy, Greece and Austria are believed to be among those likely to fail.
The banks will be given until November 10 to raise more cash. Rather than acting as a black mark against failing lenders, the tests are designed to restore confidence in the sector by giving banks that pass a seal of approval.
Analysts have estimated that total fundraising following the stress tests could reach €50bn (£39bn) and that some banks could merge to bolster their safety nets.
The EBA has previously held two rounds of stress tests, the last one in 2011, but they were seen as too sof. The current round is the first to be conducted by the ECB. To pass, banks must have had a Tier 1 Capital ratio – a measure of their safety – of 8pc last year.
Under the adverse scenarios the ECB is simulating, this can fall to no more than 5.5pc.
British banks are not expected to have failed the EBA’s review, and are facing much sterner stress tests from the Bank of England. The Bank will release the results of its own tests in December.
Deutsche Bank, Germany’s largest, is not expected to have failed the tests, despite having to raise additional funds earlier this year.
Separately, Deutsche said on Friday that it would take an €894m hit for litigation costs when it publishes third-quarter results next week. The bank said this would cover “a number of items”, although much of it is expected to be related to the Libor interest rate benchmark.
The German bank is believed to be nearing a deal with US and UK authorities over Libor rigging, which has already seen several banks in the UK and elsewhere pay heavy fines.
source
it was a very slow friday EUR/USD was trading around the support unable to break it. I think we will see a correction with the start of next week price most probably will test 1.2700
EUR/USD forecast for the week of October 27, 2014
The EUR/USD pair initially tried to rally during the course of the week, but the 1.28 level offered enough resistance yet again to push the market back down and form a negative candle. That being the case, the market should continue to go much lower, perhaps testing the 1.25 level. That area, if we break through it will have a significant effect on this marketplace as it should push the Euro much lower. We have no interest in buying until we get above the 1.30 handle, as it would show a significant uptick in positive momentum.
EU budget: Britain must pay 'and that's that' says MEP
Europe expects the UK to pay an extra £1.7bn towards the EU budget "and that's that", a vice president of the European Parliament has said.
Alexander Graf Lambsdorff, a German MEP, said the EU would be "exasperated" if the UK tried to avoid payment.
On Friday David Cameron said the EU had "another think coming" if it thought Britain would pay the bill by the 1 December deadline.
The EU demanded the extra amount because of growth in the UK economy.
Mr Lambsdorff told the Today programme on BBC Radio 4 that "everybody has to pay their dues".
'Logical consequence'
He added: "If you have higher GDP growth than forecast, that also means logically that you have a higher contribution to the community's budget.
"That is a logical consequence. That is something that everybody has signed up for."
But Conservative MP Sir Bill Cash, speaking on the same programme, said it was "quite common" for member states to ignore EU demands.
"There may be consequences, but then they have to be weighed up," he said.
Sir Bill - who chairs the European Scrutiny Committee in the Commons - also said he would call in treasury ministers to his committee to see "how they intend to handle it from now on".
Negotiation and compromise
UKIP's deputy leader, Paul Nuttall, said Mr Lambsdorff was "absolutely right" and that Britain would have "no choice" but to pay.
"It would be illegal not to pay up," said Mr Nuttall.
"But this is what we have signed up to. Frankly I think we would be better off outside this organisation, where the British taxpayer wouldn't be forced to hand over £1.7bn by 1 December.
"Mr Cameron can turn around and say he won't pay by the deadline. But he hasn't ruled out paying at all - because he will have to."
Former foreign secretary Sir Malcolm Rifkind said it was "ridiculous" to expect Britain to pay by 1 December.
But he said he expected a "political negotiation and a sensible compromise".
read more
EUR/USD Forecast Oct. 27-31
EUR/USD had an interesting week, amid speculation about central bank action on both sides of the Atlantic. A very busy week awaits us: the stress test results, Germany’s IFO survey and the all important inflation figures are set to dominate. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD.
Speculation that the ECB would begin buying corporate bonds hurt the euro and countered a continued USD correction. German PMIs gave a boost to the common currency, but France is not playing along. Worries about growth are certainly present. In the US, data was generally positive, with jobless claims and inflation holding on. Does the price of the pair already reflect the news or are we set for the next leg lower?
read more
ECB’s in-depth review shows banks need to take further action
The European Banking Authority (EBA) published today the results of the 2014 EU-wide stress test of 123 banks. The aim of the stress test is to assess the resilience of EU banks to adverse economic developments, so as to understand remaining vulnerabilities, complete the repair of the EU banking sector and increase confidence. On average, EU banks' common equity ratio (CET1) drops by 260 basis points, from 11.1% at the start of the exercise, after the asset quality reviews' (AQRs) adjustment, to 8.5% after the stress. By disclosing these results, the EBA is providing unparalleled transparency into EU banks' balance sheets, with up to 12,000 data points per bank, an essential step towards enhancing market discipline in the EU.
In preparation for the stress test, EU banks have made significant progress in strengthening their capital positions, as the starting CET1 ratio levels show. Between January and September 2014 alone, they have raised further EUR 53.6 bn of equity (EUR 39.2 bn net of repayments and buybacks) and 39.1 bn of contingent convertible instruments (both additional Tier 1 and Tier 2).
The 2014 EU-wide stress test results show an overall impact of the adverse macroeconomic scenario on the CET1 ratio of 260 basis points over 3 years, with CET1 decreasing from 11.1% in 2013 to 8.5% in 2016. The joint effect of the AQR and the stress test is 300 basis points. Over the three-year horizon of the exercise, 24 banks would fall below the 5.5% CET1 threshold and the overall shortfall would total EUR 24.6 bn.
The main drivers for this impact are credit risk losses, which account for 440 basis points of CET1 ratio decrease and an increase in total risk exposure (110 basis points).
The impact of the stress test on banks' capital positions is assessed taking into account the national transitional arrangements provided for in the Capital Requirements Directive (CRDIV) and Capital Requirements Regulation (CRR). However, to ensure consistency and comparability, the EBA is, for the first time, disclosing the impact of the stress test also on the future fully implemented CRDIV/CRR capital ratios. This additional disclosure will help market participants better understand the pathway towards the full implementation of the CRDIV/CRR. For the banks in the sample, the fully loaded CET1 ratio in 2016 under the adverse scenario would be 7.6%.
Acting as a central data hub for the entire EU, the EBA is publishing both aggregate results of the EU-wide exercise and granular data for each bank, including detailed information at both the starting and end point of the exercise, under the baseline and the adverse scenarios.
Competent authorities, including the ECB for banks in the euro area, have been responsible for assessing the quality of the data submitted by banks and the reliability of the results; they are also responsible for identifying appropriate supervisory actions that banks will be asked to take to address the vulnerabilities identified in the exercise, as deemed appropriate.
read more
ECB fails 25 banks in stress test, but capital needs low
Roughly one in five of the euro zone's top lenders failed landmark health checks at the end of last year but most have since repaired their finances, the European Central Bank said on Sunday.
The ECB found the most critical problems to be in Italy, Cyprus and Greece but concluded that banks' capital holes had since chiefly been plugged and that only 10 billion euros remained to be raised.
Italy's financial sector faces the biggest challenge with nine of its banks falling short. Monte dei Paschi had the largest capital hole to fill at 2.1 billion euros, even after its money raising efforts this year.
The exercise provides the clearest picture yet of the health of the euro zone's banks more than seven years after the eruption of a financial crisis that almost bankrupted a handful of countries and threatened to fracture the currency bloc.
Although investors may take heart, it remains to be seen whether the exercise can spur banks to lend more as the region's economic growth stutters to a virtual halt.
While 25 of the euro zone's 130 biggest banks failed the health check at the end of last year with a total capital shortfall of 25 billion euros, a dozen have already raised 15 billion euros this year to make repairs.
Alongside Italy, regulators said three Greek banks, three Cypriots, two from both Belgium and Slovenia, and one each from France, Germany, Austria, Ireland and Portugal had also missed the grade as of end-2013.
A recent survey by Goldman Sachs of large institutional investors found they believed the ECB ought to ask lenders to raise an additional 51 billion euros of capital for the tests to be credible.
Once overvalued loans across the sector were taken into account, the ECB said the overall impact on banks was 62 billion euros.
Analysts gave the results a cautious welcome, although some cautioned that it was only the beginning rather than the end of a banking clean-up in Europe.
"Although this should restore some confidence and stability to the market, we are still far from a solution to the banking crisis and the challenges facing the banking sector," said Colin Brereton of PwC.
The exercise, which saw officials trawl through more than 40 million individual bank figures, has two parts – a strict review by the ECB of assets such as loans, followed by a wider test of how banks would cope with a new economic crash.
read more
Euro up in early Asia as ECB stress test results better than seen
The euro gained in early Asia on Monday after the resuts of stress tests on European banks were released at the weekend, showing a better than expected picture of financial health for many.
EUR/USD traded at 1.2674, up 0.04%. JPY/USD traded at 108.23, up 0.07%, while AUD/USD changed hands at 0.8805, up 0.15%.
Roughly one in five of the euro zone's top lenders failed landmark health checks at the end of last year but most have since repaired their finances, the European Central Bank said on Sunday.
Painting a brighter picture than had been expected, the ECB found the biggest problems in Italy, Cyprus and Greece but concluded that banks' capital holes had since chiefly been plugged, leaving only a modest 10 billion euros ($12.7 billion) to be raised.
Italy faces the biggest challenge with nine of its banks falling short and two still needing to raise funds.
The test, designed to mark a clean start before the ECB takes on supervision of the banks next month, said Banca Monte Dei Paschi Spa (OTC:BMDPY) had the largest capital hole to fill at 2.1 billion euros.
In Japan, the September service producer price index is due at 0850 Tokyo time (2350 GMT) with a previous reading of 60.7%.
At 1800 in Sydney (0700 GMT), the RBA's Finance Stability Head Luci Ellis participates in a panel discussion at the Australian Housing and Urban Research Insitute Roundtable.
Last week, the euro pushed higher against the dollar on Friday after data showed that German consumer confidence improved, while upbeat U.K. third quarter growth data underpinned investor demand for the pound.
The euro found support after the forward looking Gfk index of German consumer climate ticked up to 8.5 for November from a revised 8.4 in October. The index had fallen sharply in the preceding two months as concerns over geopolitical risks and the ensuing economic slowdown weighed.
Concerns over a confirmed Ebola diagnosis in New York City last week bolstered safe haven demand for the yen and saw the dollar weaken slightly.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.19% to 85.79 late Friday. The index still ended the week higher, stabilizing following a steep selloff in the previous week.
Fears that a slowdown in global economic growth could act as a drag on the U.S. economic recovery have prompted investors to push back expectations for an increase in interest rates by the Federal Reserve to the second half of 2015.
read more
EURUSD tried to rally during the day on Friday, but as pullback significantly in order to form a very neutral candle. This market continues to stroll sideways and essentially not offering much to trade and because of that the market is still bearish, but we are looking for some signal that’s worth selling. A break down below the 1.2613 level has the market heading to the 1.25 level, just as a bounce from here should have sellers stepping in near the 1.28 level.