European stocks posted solid gains ahead of a wave of US economic data, including weekly initial jobless claims. London's FTSE rose 0.5%, Germany's DAX rose gained 0.8%. France's CAC-40 followed, 0.7% higher. The dollar came under modest pressure as investors favoured higher yielding assests over governement bonds. Also, the Bank of England kept the UK base rate unchanged at 0.50%, a record low, and said it will keep QE under review, as expected. This did not help gilts. Long gilt March futures failed to recover from the overnight beating it received, trading down nearly 90 ticks to 116.34. Earlier the European Central Bank released its monthly bulletin for November. It noted that EZ households savings increased "sharply" in the past year, reflecting "the rise in both economic and financial uncertainty throughout the turmoil". So far it seems unlikely that the EZ consumers will take over the role, held by the US consumer ahead of the crisis, in spurring global demand. The dollar weakened somewhat against major European currencies. EUR/USD moved higher in European trade to hihgs of 1.4749 after hitting lows at 1.4684. Cable edged higher to 1.6310. EUR/GBP was down 21 pips to 0.9036. The yen fell against dollar, euro and sterling with USD/JPY at 88.42. Ten year March Bund futures fell 10 ticks to 123.25. Globex January WTI futues moved sideways in wide ranges between lows of $70.44 and highs of $71.25. ICE January Brent futures also traded in ranges between lows of $72.30 and highs of $73.26. Globex gold futures moved away from highs hit overnight down to $1,1250.

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