2013-03-08 06:30 GMT

Fed's stress test: banks better prepared for downturn

Stress tests results in the US, conducted by the Fed as an exercise required under the 2010 Dodd-Frank financial overhaul, have shown that 17 out of 18 banks stress tested meet the minimum requirement of tier 1 capital above the 5% threshold, noting that banks could weather sharp downturn with adequate capital. FED said 18 banks projected losses may amount $462 billion under severe market shock, with the test assuming an equity drop of more than 50% and housing prices decreasing more than 20%. The only bank failing to comply with the 5% tier 1 capital was Ally. In summary, all bans combined showed they exceed regulatory minimums although there were wide gaps among them.

The February US jobs numbers are not expected to differ substantially from those registered in the recent months, although the market experts participating in the forecast report suggest that they will rather be somewhat lower. This time the range of predictions is relatively narrow: between 110K and 200K jobs added. Alexandra Estiot who sees the US labor market growing by 180-200K in February justifies her optimistic forecast by saying that "in late 2012, some signs of strengthening were already obvious, with non-farm private payrolls growing by more than 200k a month" and that "leading indicators are pointing to a strengthening of that trend, with employment components of ISM surveys at historical highs." She nevertheless warns about the effects of the automatic budget cuts which after being implemented might harm the labor market. Other analysts, who expect more modest jobs gains in the range of 130K-170K, are also worried about the impact of the sequester and some suspect that the steady growth trend might be coming to an end. Steve Ruffley points to a similar situation in the corresponding period of last year: "We have seen a steady decrease in 2013 from the NFP highs of 247K to last month’s figure of 157K; this mirrors the start of 2012 where the NFP went from 259K to 154K." Should the reading prove better than expected "it could cause short-term positive reaction in the stocks market," as Talal Abdullah suggests and adds that "the uptick in NFP should increase the appeal for the U.S. dollar, as it raises the outlook for growth." US NFP numbers for February will be released on March 8 at 13:30 GMT.-FXstreet.com

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United Kingdom. Consumer Inflation Expectations

2013-03-08 11:00 GMT

Germany. Industrial Production s.a. w.d.a. (YoY) (Jan)

2013-03-08 13:30 GMT

Canada. Unemployment Rate (Feb)

2013-03-08 13:30 GMT

United States. Nonfarm Payrolls (Feb)

2013-03-08 05:33 GMT

GBP/USD unable to hold above 1.5000

2013-03-08 05:20 GMT

Draghi rescues Euro from its $1.30 agony, can it last?

2013-03-08 03:26 GMT

NZD/USD pullsback to retest 0.8260

2013-03-08 02:38 GMT

USD/JPY prints yet another fresh high above 95.20