Next week, the ECB will conducting their second long term refinancing operation. The impact of their first LTRO was significant – in fact, it sparked the stock market rally. If the uptake next week is anywhere close to EUR1 trillion, we could see a similar reaction. The following chart shows how the EUR/USD, the S&P 500 and the German DAX performed since last month’s operation. The vertical line points out the date of the LTRO. Impressive how far a bit of liquidity can go eh?