ECB

ECB Outright Monetary Transactions: In the previous two monetary easings, the ECB carried out a "Long Term Refinancing Operation" whereby the central bank pumped liquidity into the mkts by lending out low-interest loans to banks. This time, the liquidity provided will be fully "sterilized", meaning that money will be drained from other parts of the financial system so as to neutralize the money supply in the Eurozone. This targeted liquidity will help the credit crisis by directly lowering borrowing costs for countries like Spain and Italy. In turn, this will reduce the risk of contagion as widely expected. With the details of the OTMs released, Europe and the US equity markets celebrated. One may expect it to have an effect on equity markets in Asia with the correlation between global markets these days.