European banks will probably tap the ECB for 470 billion euros ($632 billion) in three-year funds, according to a Bloomberg News survey of analysts. Italy auctions as much as 6.25 billion euros ($8.4 billion) of bonds today. Consumer confidence may have increased this month, economists said before data from the Conference Board.

“The market is expecting a further boost from the liquidity injection,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd.

Eoin Treacy's view The ECB's about face in its attitude to liquidity provision spurred an impressive rally over the last two months, marking the best start to a year for stock markets in quite some time. The second injection is scheduled for tomorrow and can be expected to provide at least as much as the first round. Many investors have already positioned themselves to benefit from this development. This has contributed to the short-term overbought condition evident on many stock market indices and in oil contracts.

However, while the short-term risk of a consolidation has risen, the importance of the change to monetary policy at the ECB and the Bank of Japan is a more significant consideration. The evidence to date suggests that monetary policy is to remain accommodative for the foreseeable future. Money creation might be local but in a global economy, capital flows to the most productive assets. This is helping to fuel a cyclical bull market in stock markets. This suggests that reactions should be limited to pullbacks towards the mean rather than the swinging drops experienced in the latter half of last year provided liquidity remains abundant.