The ECB announced yesterday morning a greater than expected second Long Term Refinancing Operation (LTRO) with 800 euro-zone banks which took advantage of borrowing 529 billion euros for 3 years at 1%, compared to 523 banks borrowing 489 billion euros last december.
In testimony before Congress, Fed Chairman Bernanke gave no indication in his speech that the central bank will take new actions to increase liquidity. The euro went lower against the dollar following higher than expected borrowing form banks in the LTRO and on Bernanke speech meaning less fiscal stimulus in the US.
For bond and stocks investors if the US economy continues to grow, there may not be more quantitative easing 3, which could have a negative impact on both stock and bonds.
The US beige book has been published yesterday evening stating that the “overall economic activity continued to increase at a modest to moderate pace in January and early February”
You can download the full content of yesterday US Beige book here:
Have a nice day
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