The euro traded just below 12-week highs, stocks were firmer and safe-haven German bonds edged lower on Tuesday as the European Central Bank's upcoming liquidity injection supported prices and eclipsed concerns over Greece and the global economic outlook.

The pressure on riskier assets from oil prices also eased as Brent crude futures extended losses and slipped below the $124-a-barrel level, ending a surge that threatened to dampen the fragile economic recovery.

Markets expect European banks to borrow about 500 billion euros (422 billion pounds) of the cheap funds to be offered by the ECB on Wednesday, although forecasts range from 200 billion to 750 billion euros.

The ECB's second 3-year (loan tender) is rapidly approaching, and it appears the market has priced in a take-up just below the previous 489 billion euro borrowed from the first long-term refinancing operation, Chris Tedder, research analyst at said in a note.

The euro edged up 0.2 percent to $1.3428, off a near three-month high of $1.3487 reached on Friday. The U.S. dollar, meanwhile was slightly higher against the yen at 80.66 yen, but below a nine-month high of 81.66 yen hit on Monday.

The FTSEurofirst 300 <.FTEU3> index of top European shares opened barely changed at 1074.75, below a seven-month high hit last week before rising oil prices unnerved investors.

A solid session on Asian markets, helped by strong gains in Japan's Nikkei index <.N225> pushed the MSCI world equity index <.MIWD00000PUS> up 0.27 percent to 331.72.

(Editing by Anna Willard)