Yesterday stock indexes finished trading session in a red zone. Weak quarter results of a number of the largest companies, and also Mario Dragi's statement for the forthcoming stress tests of banks became the main reason for a suspension of 9-day rally, the longest for the last 40 months.
Papers of the European banks were under strong pressure. The reason for that has been speech of the head of European Central Bank M.Dragi, who during his press conference stated rather rigidly that if the bank didn't pass a stress test, it needs to be bankrupted. This means that peripheral banks shouldn't count on the help from outside. I will remind that already in November, the European regulator will begin complex check of the financial institutions. Any bankruptcy even if it will be initiated by the government of the country, will promote sales of shares, especially in banking sector.
The British FTSE 100 receded for 0,32%%, French CAC 40 lost 0,81%% and German DAX weakened for 0,31%%.
Strangely enough, all these conversations had limited impact on EUR/USD. Analytics are stating that lately euro is in demand from Asian institutional investors which are reconsidering the currency reserves and are not believing in dollar. Pair from level of opening 1,3779 went down to a minimum of 1,3741 and this morning went throw the level of 1,38 and is traded on a level of 1,3815.
USA indexes also moderately decreased, however significant sales didn't happen. Following the results of the trading session the Dow Jones index decreased by 0,35%%, and S&P500 - for 0,49%%. The Chinese Shanghai Comp. decreasing by 0,2%%, and the Japanese Nikkei falling for 0,6%% are the outsiders of the day. In particular, it can be caused by the publication of preliminary data on an index of business activity in China according to the HSBC version - the indicator decreased to 50,9 points.
Today there will be one more chance to check, what economy is recovering more steadily. Data on business activity in manufacturing industry and in services sector of Eurozone and Germany will cause a great interest of the market participants. If business activity in both sectors will appear again above forecasts, demand for currency pair will increase. In case EUR/USD will break level of 1,3780, pair will direct to the area of 1,3840.
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