5 by the ECB the Euribor 3 months fell to 4

The victory of Obama or European Central Bank rate cuts raised enthusiasm in markets. The Dow Jones fell 4.08 in five sessions, and in Europe, the DJ Stoxx 600 dropped 1.1.

Less ambitious preliminary announcements, the perspective of the G20 Summit on the reform of the international financial system, on 15 November in Washington, was unlikely to disrupt the sense of the investors. They are bad history after a procession of disastrous indicators on both sides of the Atlantic. October us employment figures were accredited the scenario of a deep recession. With unemployment at the top for fourteen years, the main lever of growth, consumption, is seriously threatened. Sales at retail, to be published Friday, is eagerly awaited by the financial community. The flow of bad news may not seize up in Europe. Friday figures should show that the technical recession (two quarters of contraction in activity) is.

The spectre of deflation

Difficult, in this context, to expect that salvation comes from businesses. American automakers have given warning on their situation. In Western Europe, the season of the quarterly results, for the moment, in an average decline of 9.1 of the results, according to Bloomberg. Other publications are still expected, particularly in the banking sector, with the quarterly of Credit Agricole, Dexia or HSBC. Today, analysts forecast the results of listed companies of the DJ Stoxx 600 by 6.8 this year while early 2008, they anticipated a growth of 11.

Several strategists however noted that the signal to buy is given on the markets. Particularly as a result of the low valuations. "The passage in the facts of the decline in oil prices will help the shares back," adds François Chevallier in VP Finance, which notes that this variable is not yet integrated in the course. "The current interbank standardization guarantees a floor-to-actions on level affected October 27", he says. Because the return of the confidence of operators is closely related to the situation in currency markets. The arsenal of measures deployed by the central banks is already present on the interbank rates. In the aftermath of the reduction of the rent of money of 0.5 by the ECB, the Euribor 3 months fell to 4.47 he was at 5.39 on 9 October. The cost of borrowing for banks in pound sterling was, him, 4.49 Friday. 150-Point basis of the rates of the Bank of England has caused a dramatic relaxation of Libor 3 months: in one day, it decreased by more than 1. Banks can go into debt in the short term to a more reasonable rate. But, at this stage, these indicators remain a sham: banks still refuse to lend cash and prefer to store them, in particular in the context of the passage of year end.

Economy pays the price. After the Fed, the European Central Bank's quarterly survey shows that companies are facing a "significant" tightening of credit conditions. Worse, banks believe that the vise will still tighten in the coming three months. Where should central bankers lower interest rates The question obsession markets, as the spectrum of the debt deflation resurfaced.