On reviews RoyalMaxBrokers, one of the main results of the weekend can be considered that Spain still became the fourth eurozone country (after Greece, Ireland and Portugal), to seek external financial aid.The amount required to recapitalize the banking system, is 100 billion euros.Market reaction to the news received on Saturday turned out to be quite volatile: trading on the foreign exchange market opened sharply jump up quotations pair EUR / USD, which has tried to overcome key resistance 1.2625 (high of the day - 1.2670).
However, according RoyalMaxBrokers , very soon, market participants overestimated the meaning of the Spanish "salvation": after all, this impressive sum tells the plight of the banking sector's fifth-largest economy in the region.In addition, immediately there was talk of a very precarious state of the financial system in Italy, which could be the largest victim of the debt crisis.Not surprisingly, in these conditions, the European currency fell sharply against the dollar and is quoted in today's trading below the psychological mark of 1.25.A key short-term support level is 1.2450.
RoyalMaxBrokers believes that the downward pressure on the euro is increasing in proportion to the yield on Spanish debt securities: on the eve of the yield on 10-year bonds rose to its highest level since the country's entry into the currency bloc.The driver of such a sharp move was the decision by Fitch downgraded the credit ratings of 18 Spanish banks, including such major organizations as Santander, BBVA, and Banco Populari."The rating actions are primarily related with the decrease of the sovereign rating of Spain," - said in a statement the agency. Analysts Fitch also noted an increase in public debt, the recession in which the economy of the country and from which, according to some projections, it will be released no earlier than 2013as well as fears of a repetition of "Greek scenario".
Yet, despite the actions and Fitch market turbulence Spanish debt, global stock indices managed to grow in the Tuesday session. Investor sentiment was supported by the statements of representatives of the ECB, which are once again talking about the need for the infamous banking union. Favored were received and comments of President Federal Reserve Bank of Chicago Charles Evans, who in an interview with Bloomberg expressed his support for additional monetary stimulus by the central bank.
The focus of the market in the next few days will the news from Europe. The Greek history, it seems, is backon the front pages of leading mass media.Market participants are speculating on the subject of parliamentary elections to be held on June 17 and may decide the fate of the host country in the eurozone.In addition, the importance of the purchase of Italian debt auctions bills (13:00) and German 10-year bonds.
