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FXCM’s US.BANKS basket responds positively to banking stress test

Russell Shor Written by Russell Shor
  • US.banks
    (${instrument.percentChange}%)

On Wednesday, the Federal Reserve released the results of their annual bank stress test. All 23 banks that were included passed the test, weathering a severe recession scenario, continuing to lend to consumers and corporations.

In its release, the Fed said that despite facing projected losses of $541 billion, the banks successfully upheld minimum capital requirements, managing to extend credit to the economy during the hypothetical recession.

This has set up banks to return cash to shareholders. Following the end of regular trading on Friday, banks are anticipated to unveil revised strategies for buybacks and dividends. Given the possibility of a recession later this year or early next year, banks will likely adopt a cautious approach when formulating their capital plans.

Nevertheless, FXCM's US.BANKS basket has responded positively. Yesterday, it charted a long and positive candle (blue arrow), which lays the platform for possible higher prices ahead.

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Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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