Energy prices rebound after plummeting for 3 days. WTI crude oil for February delivery trades above 80 in European session despite lack of bullish news. The rebound is likely due to short-covering by traders. Gold price trades around 1140 while other precious metals also have little change after yesterday's recovery.

Market's focus today is the ECB meeting. However, we do not expect any change on the monetary policy. Policymakers should keep the main refinancing rate at 1% and reiterate current level of interest rate is 'appropriate'. Although the President Trichet stressed that the central bank has not yet for tightening, several liquidity withdrawal measures he announced in December were 'tightening' effectively.

At the previous meeting, the ECB announced that the rate in the last 12-month longer-term refinancing operation (allotted on 16 December 2009) would be fixed at the average minimum bid rate of the MROs over the life of this operation. Moreover, the 6-month longer-term refinancing operation on 31 March 2010 will be the last one. These measures obviously indicated the ECB is reducing the take-up of repos and guiding banks to the market for term funding. In other words, the ECB is effectively 'tightening' ahead of the Fed. While this should push the euro higher against the dollar in the near-term, underlying fundamentals (Debt problem in Greece and economic growth) in the Eurozone may limit upside of the single currency.

Credit downgrades by S&P and Fitch unveiled the debt problems in Greece and the government has been formulating measures to reduce the astronomical budget deficits. According the finance minister, George Papaconstantinou, Greek deficit will be reduced to 8.7% of GDP in 2010 from 12.7% last year. In 2011, it will be further cut to 5.6%. The figure will be below EU's limit of 3% of GDP by 2012. However, the EU doubted about the deficit figures provided by the government and therefore, it's still uncertain if the these outcomes are achievable.

Stock markets rise strongly after tumbling Wednesday. The MSCI Asian Pacific Index soared +1% as boosted by strong Australian employment data. Payrolls rose +35.2K in December (consensus: +10K) following an increase of +31.4K in the previous month. Unemployment rate fell to 5.5% from a downward-revised +5.6% in November. In European morning, benchmark indices gain around 0.5% on sideways trading ahead of the ECB meeting.