Please find below the Financial Fixed Odds report from David Evans, market analyst at BetOnMarkets.

Equity markets are under pressure again today as the bleak economic news flow continues.

UK banking shares fell in early trading on the release of the FSA’s stress test methodology, which many have interpreted as not being stressful enough.

The market appears to have priced in more adverse test conditions, causing many traders to re-asses their assumptions about the UK banking sector’s ability to weather a sustained economic downturn.

In the US, it seems to be the case that jobless claims data is setting a new record every week. Continuing claims are showing no signs of retreating and it is no coincidence that mortgage delinquencies reached a record high of 9.12%.

There was some positive news with new home sales rising month on month, but the down trend remains very much in place for the time being.

The bad news keeps on coming, but markets appear to have developed a layer of Teflon coating to some degree. The news flow has been poor these last few days and markets have wavered. However we are not seeing the cataclysmic drops that were happening almost daily at the peak of the crisis.

The bad news may finally be being priced in, either that or equities are still naively optimistic. Crude Oil’s continued strength hints at the former being closer to the mark as cental bankers turn their focus to forward inflation rather than an imminent apocalypse.

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