Europe will be in the crosshairs until Friday, when the EU bank stress tests results are announced. Let’s get a quick checkup on the area.

Ireland was downgraded by Moody’s. This wasn’t a big surprise, but the timing couldn’t be much worse for Ireland. They will attempt to auction a decent amount of debt tomorrow.

Hungary and the IMF ended talks unsuccessfully. Hungary has received a loan from the EU and the IMF. These talks were over a bit of deficit spending (a small fraction of, say, deficit spending in the US). The Forint and Hungarian stocks both took a beating.

Spain and Portuguese debt yields improved today. This was badly needed, as it appears as if the ECB has been a significant buyer of Spanish debt recently.

The previous link also offers a condensed version of recent Greek news:

Greece, which sparked Europe’s debt crisis in October when a new government said the budget deficit was more than twice the previous administration’s estimate, sold 1.625 billion euros ($2.1 billion) of 26-week bills on July 13. The notes were sold at a yield of 4.65 percent and investors bid for 3.64 times the amount offered.

4.65% on 6 month debt? Yeah, no problems with funding here.

There are already rumors about specific banks failing the stress test. However, Goldman said that the stress tests won’t force banks to sell many additional shares. This was one of the mechanisms that the US banks used to buy their way back out of TARP. This was previously discussed as one of the ways that banks would raise capital if they failed the stress tests. Curious.

Friday is going to be an interesting day. I can’t say that this has been the best PR exercise by the EU. I am genuinely curious how the announcement is going to be made so as to cushion the blow to any banks that do fail the tests.