Investors were spared immediate pain on Sunday after the European Central Bank's landmark banking health check did not force massive capital hikes amongst the euro zone's top lenders.
After putting the euro zone's top 130 banks through their paces, the European Central Bank will face a test of its own on Sunday - will its landmark health check succeed in convincing investors the region's lenders are safe?
German Chancellor Angela Merkel thanked ECB President Mario Draghi for spelling out to leaders at an EU summit that governments must play a role in boosting the faltering euro zone economy, and said it was their firm intention to do so.
Global stock markets were heading for their best week of the year on Friday following reassuring company results, encouraging data from the world's biggest economies and signs the ECB is upping its efforts to lift Europe.
If the European Central Bank really wants to kick-start the euro zone economy, it should ensure the bloc's banks are up to the task of lending.
European shares edged up and the euro hit a one-week low against the dollar on Wednesday, driven by upbeat company earnings results and hopes of corporate bond buying by the European Central Bank.
A measure of global equity markets advanced on Tuesday as technology earnings lifted U.S. shares and the prospect of European Central Bank corporate bond purchases boosted European stocks, while weighing on safe-haven U.S. Treasuries prices.
When Europe announced its latest health check of top banks early last year it promised a "comprehensive assessment" of how well prepared they were to withstand another financial crisis.
Evaporating inflation and slowing growth have put financial markets into such a spin that they could inflict further damage on the world economy.
Global shares fell to a six-month trough and Brent crude futures tumbled to their lowest since 2010 on Friday as investors worried about the prospect of a widespread economic slowdown just as U.S. monetary stimulus nears its end.
Asian stocks slid on Wednesday as worries about waning global growth lifted safe-haven bonds and the yen, while shoving oil prices to their lowest in more than two years.
The dollar rose above 110 yen for the first time in six years and held near a two-year peak against the euro on Wednesday, as investors added to bets that U.S. data will drive the Federal Reserve to tighten policy.
World markets were in hesitant mood on Tuesday as investors wondered what China's response would be to civil unrest in Hong Kong, while the U.S. dollar eased off the throttle after its biggest quarterly gain in six years.
Lending to euro zone households and companies contracted for the 28th month in a row in August, though at a slower pace, putting a keener spotlight on European Central Bank efforts to get credit flowing again.
Euro zone business activity has expanded at a slightly weaker pace than expected in September as firms cut prices for the 30th month in a row, a survey showed on Tuesday.
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