BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Categorized | Currencies

Dollar rally cools as attention turns to Opec meeting

Posted on November 28, 2016

A cooler dollar, softer stock markets including more pressure for Italian financials and slipping oil prices are the main factors setting the pace at the early part of the European trading day.

The dollar is taking a breath after run higher, with the index tracking the world’s reserve currency against six of its rivals down 0.5 per cent, although it is holding the 100-point mark at 100.940. As well as the slip in the dollar index, the euro is up 0.7 per cent against at $1.0653, while the pound is 0.1 per cent stronger at $1.2488.

Brent crude is down 0.2 per cent at $47.15 a barrel and West Texas Intermediate is down 0.5 per cent in the run up to Wednesday’s Opec meeting in Vienna, at which the producers’ organisation will consider cutting production.

Oil prices had been buoyed in the first half of last week by hopes members of the cartel would use this week’s meeting to agree to production cuts that would help address global oversupply, but the with negotiations in the run up to the meeting going, down to the wire nervousness has returned to the market. In Friday’s half-session following the US Thanksgiving holiday, oil prices fell more than 3 per cent.

Eurozone financial stocks — led by Italy — are back in the spotlight in the run up to next weekend’s constitutional referendum in the country. Up to eight of the country’s banks could face pressure if prime minister Matteo Renzi steps down from office should he lose the vote.

Mr Renzi, who has said he will resign under those circumstances, has advocated a market solution to address the problems of Italy’s banking system. The political situation is being closely followed by financiers and policymakers across Europe and beyond, who worry about the implications of more wide-ranging problems in the Italian financial sector for sentiment toward wider eurozone banks.

In opening trade on Monday, Unicredit shares fell 4 per cent in Milan, one of the biggest single falls on top-tier stock indices in the region. Intesa Sanpaolo fell 2.1 per cent. Generali, the insurer, fell 1.6 per cent.

The Euro Stoxx sub-index tracking banks is down 1.4 per cent, a wider fall than the 0.8 per cent decline on the full Euro Stoxx 600 index. The FTSE MIB in Milan is down 1.9 per cent, while London’s FTSE 100 is down 0.9 per cent and the Xetra Dax 30 is down 0.8 per cent.