Reply #2: EU "Summit Optimism" (Reuters)

[Ghost Dog]

... Optimism that policymakers would successfully address the euro zone debt crisis, and last week's announcement that coordinated central banks action would provide cheaper dollar funding for European banks, has helped boost investor confidence...

... The European Central Bank is expected to cut rates to 1 percent and unveil a new package of bank aid on Thursday, with markets also watching for any hint it will intensify its bond buying support. The ECB decision is expected at 1245 GMT.

France and Germany are to sound out European leaders about their plan to defuse the euro zone's debt crisis, eager to rally support before a high-stakes EU summit. The plans include tougher budget discipline. "There's anticipation of something solid, good news. You don't want to be short in case France and Germany put something significant together," said Yusuf Heusen, sales trader at IG Index...

... Strategists said the market was also pricing in the ECB starting quantitative easing... Jeremy Batstone-Carr, strategist at Charles Stanley, said the market could fall 6 percent if the ECB did not indicate it would print money and only "vague platitudes" emerged from the summit...

/... http://uk.reuters.com/article/2011/12/08/markets-europe-stocks-idUKL5E7N813W20111208