The markets have been subject to large moves in recent days. Some, including the dollar, were counter-trend moves. Some, like oil, were accelerations of the existing trends. There have been a number of surprise developments today, including the less dovish Reserve Bank of New Zealand and the 25 bp cut from Norway's central bank. The markets are trying to stabilize, and the dollar's correction appears to have exhausted itself.  

The euro had already peaked just shy of $1.25 before the ECB's announcement on the TLTRO and came off further on the news. The euro recorded the session low near $1.2415 shortly after the announcement.  

Banks borrowed about 130 bln euros from the ECB under this facility. It was more than the first TLTRO, but less than half what was available.  It underscores how far the ECB is away achieving its intention of driving its balance sheet up by a trillion euros. Peripheral European bonds were recovering from this week's slides. The modest participation kept bonds firm, though Greek bonds remain under pressure. Samaras's gambit to bring forward the presidential selection process means raising the political concerns. Thus far, there is little contagion. 

This is thought achievable only in an asset purchase program that would include sovereign bond purchases, which is extremely controversial; raising political, legal and operational challenges.  Note that about a week before the next ECB meeting, the European Court of Justice is to hand down a non-binding ruling on the legality of the OMT program.  

However, more immediately, attention will turn to the US consumer as the November retail sales are reported. The market will look past any softness in the headline that might  be restrained by the drop in gasoline prices. The component that excludes autos, gasoline, and building materials, is used for GDP calculation should be firm. The 12 and 24-month averages are 0.3%.  The US may report its second consecutive 0.5% monthly increase and the third in four months.