FX.co ★ Fundamental Analysis, July15, 2011

This week sparked a crisis in the financial sector in Italy which also extends to other banks in countries like Spain and others. On Monday, met the authorities of the European Union, together with representatives of the governments of Italy and Greece in order to discuss the problems of the region and try to stop the contagion effect. Many analysts now argue that the next country in question could be Italy.

The situation in the Italian banks is more than troubling: the index of stock market prices in Italy, and on Tuesday broke the lows of 2010. The casualties have been deepened on Tuesday (after negative wheels on Friday and Monday), mainly in Italy where the Unicredit bank suspended trading on the Milan Stock Exchange after touching a flat maximum daily loss on Monday (down over 25% in only 4 days).

On the other hand, the Italian government debt is at a record highs even above 1997. He is currently a major concern of Italian investors and reached 120% of GDP.

The level quoted is too high, especially if you compare that with all the total debt of the eurozone which has yet to reach 90% of GDP. As the estimates for the future, according to leading investment banks, it is estimated that the Italian government debt continue to rise in the short term and then stabilized levels closer to 100%.

There is no knowing exactly how much exposure to sovereign debt that banks are buying and that leads to very large hidden risks. Meanwhile, regulators from European banks to try to calm the market through the "stress test".

Today we know these results of stress, which is the main focus, when the data will be available from 16:00 GMT. The EU publishes its trade balance and therefore it does with U.S. inflation figures, the New Yorker area manufacturing index, industrial production and confidence figures on consumption.