httpvh://www.youtube.com/watch?v=Alo97X_mhr4

It’s all go go go at the moment in financial markets as politicians of every persuasion and bankers of every stripe attempt to prevent another financial meltdown.

Overnight the EU have announced a EUR750bn aid package for the entire region with EUR220bn coming from the IMF. This is enough money to meet the funding requirements of Spain, Portugal, Ireland and Greece for the next year. An economist at Unicredit put it best by saying:

“This is shock and awe part II and in 3-D, with a much bigger budget and a more impressive array of special effects,”

The full details will not be available until a press conference on Wednesday but this is a massive package. Go big or go home seems to be the order of the day. The money will come from the ECB buying up government debt from member states; quantitative easing EU style simply.

As with all the bailout packages that we’ve seen announced over the past few months we have seen a risk rebound this morning with the euro benefiting by up to 2% and Asian markets currently a similar amount higher. Bank shares and risky assets will punch the FTSE higher when it opens at 8am. Whether this good sentiment will last is the question; it hasn’t in the past, but is this package big enough?

Here in the UK the negotiations between the Lib Dems and the Conservatives continue today having not struck a deal over the weekend. Vince Cable, the Lib Dem Shadow Chancellor, told reporters yesterday that ‘deficit reduction was at the heart of the negotiations’ probably in a bid to quell fears in the markets come today’s open. More on the prospects for the pound will be available in our sterling update published later today.

Data-wise we have the Bank of England’s rate announcement at 12.00. No change is expected and any comment on the election will be keenly viewed