Another blood bath is coming for European trading

Another red session in Asia that reinforces concerns that China's economy is slowing down, shrinking global growth. For this reason, I expect negative trade during the first hours of the European session, with trending stocks - banking and technology being under the greatest pressure.

Investors in Europe's thinly performing banks know the disappointing reports of corporate earnings to the pain, but the third quarter has also led to an unusually high number of market scandals and shocks that could have trusted the confidence and patience of traders.

The collapse of the Turkish lira, the turmoil over the Italian budget, the scandal of massive money laundering in Denmark and the geopolitical tensions surrounding the war are just part of the events that push the banking sector. This means a lack of trading in securities for the largest investment banks, adding to the new challenging quarter for investors.

Deutsche Bank AG, the largest creditor in Germany, will launch the Seasons report on Wednesday with Braclays Plc, giving a first glance how European investment banks deal with their US counterparts. Analysts forecast a tough quarter and expect Deutsche Bank, Credit Suisse Group AG and BNP Paribas SA to decline year-on-year. UBS Group AG, Barclays and Societe Generale SA can win. Most of the largest investment banks on the continent are expected to report declines or slow growth in third-quarter trading revenues. Banks in Europe are likely to follow their US rivals in the publication of negative data for the fixed income trade. Goldman Sachs Group Inc., which reported a 10% decline, partly accused "low volatility and lower activity ... especially in Europe" - an ominous sign - and also pointed to a decline in credit trading. Some analysts expect double-digit declines in Credit Suisse, Deutsche Bank and BNP and smaller declines in Barclays, UBS and SocGen.

Indicative opening prices of European stock indices:
UKX: 7006 -35 points
DAX: 11437 -92 points
CAC: 5031 -32 points

Today, the economic calendar in Europe remains empty, with the accent coming at 6:30 pm with the announcement of BoE CEO Mark Carney. The traders will follow his comments on signals about the future of monetary policy along its path of normalization, as well as the impact of Brexit's approach to health and the development of the economy.

Picture: pixabay.com

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