Market Vibrations: News and Commentary from the Europe Desk (1045 GMT)
1045: The ECB today lent banks 529.5 billion Euros in a bigger refinancing operation than most expected. 800 banks participated in the bid for fresh liquidity, as opposed to 523 in December. EURUSD dropped about 40 pointson the news, but the market seemed unsure which way to go as it attempted to form momentum. Other currencies were strong against the Euro. BoE's King said of the LTRO: "It removes the possiblity of a bank run in the Eurozone."
0920: Unemployment in Germany held at 6.8% in January. The number represents a twenty year low in unemployment. The number of unemployed people remained at 2.87 million; economists had forecasted a drop of 5,000 unemployed. Meanwhile, the Bank of Japan's Shirakawa has said the BOJ will pursue strong monetary easing.
0710: Risk seems to be on going into today's European session ahead of the ECB LTRO announcement later today, with currencies well bid against the US dollar. The latest market rumours put the LTRO at close to EUR 525 billion (while bank analysts are forecasting EUR 450 billion). Besides the all-importantLTRO, keep your eyes out for German unemployment and Eurozone inflation later in the European session.