Update 10:15: Markets have come back a bit, as more details come to light. The euro has also stabilised, following some new info from the ECB about how the stress tests aren’t a joke, but are actually more stressful than the US version. See details here.
Original post: The collapse in the euro has brought US markets down with them. After futures were up earlier, the directly is for negative action early on.
According to Bloomberg, via ZeroHedge, the stress tests are going very easy on sovereign debt, and will only presume a haircut if the bonds are held on trading books, not held to maturity, thus ignoring a large risk.
That the stress tests wuld take the easy way out was always a risk. We knew that just the right banks would pass (most of them) and just the right banks would fail (the Spanish Cajas), but a too-perfect stress test makes the whole thing irrelevent.