Stress tests for European Banks released late Friday showed 7 banks failed the test with their capital ratios falling below 6% under the scenario. Those 7 institutions are in discussions to bolster their capital. The capital shortfall was 3.5Bln Euro which was significantly below fears of a 30- 90bln shortfall.
UK GDP
The UK may be turning a corner with a very solid reading of 1.1% growth for the qtr in their GPD which was the highest for 4 years. It equates to an annual rate of 1.6% yr on yr. This is the first 12 month rise since June qtr 2008. The Q2 strength due to solid contributions from construction, govt, and manufacturing are unlikely to be repeated in Q3. Expectations are for 0.5% growth.
CPI
Australian CPI is due to be released on Wednesday with forecasts for underlying inflation, the measure the RBA focuses on, at 0.7% which is unlikely to push them into easing. If it gets to around 0.9% that might be a different story.
