Back on Thursday of last week, after WTI Crude had dropped down to 93.91,
we made the following comment:
The most important take away from all of this is the fact that both WTI and Brent Crude were down over 6%. This means there's more room for the Central Banks to provide liquidity. Be prepared for more action (or at the very least, proposed action) by the CBs over the coming days and weeks.
So earlier today we got the following news (
source WSJ):
The European Central Bank received orders for €489.19 billion ($639.96 billion) of three-year loans for banks under its latest long-term refinancing operation, far ahead of expectations and a record for any ECB facility. That should ensure the financial season of peace and goodwill extends well into the New Year, although whether it provides any longer-term solution is less clear.
The reaction in European equity markets wasn't quite as strong as one would've expected, with only one Eurozone equity market, Cyprus, among the top 10 performing benchmark equity indexes on Wednesday.
WTI Crude front month future contracts are back up to 98.90, so I'd be surprised to hear any other announcements of major CB interventions at these levels. Here's the WTI line chart:
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