Traders note a report out of the high profile NY fund adviser saying that no matter what the final decision is on the ECB’s 1 year refi operation (LTRO), the overall message from the ECB will be dovish.
The debate is whether the December LTRO will be done at a fixed 1% or indexed to the refi rate, which means if the ECB hikes rates during 2010, the rate banks pay for their long-term funds would rise as well.
This is pretty much conventional wisdom, so won’t move markets much. EUR/USD is range trading at 1.5077.
