A majority of euro money market dealers expect the European Central Bank to carry on buying sovereign debt in secondary markets once the eurozone's beefed-up rescue fund gets the powers to do the same, a Reuters poll showed on Friday. Thirteen of 22 traders said they did not expect the ECB to withdraw from its bond-buying programme in favour of the European Financial Stability Facility (EFSF).
Euro zone leaders agreed on Thursday to boost the fund's firepower to $1 trillion ($1.4 trillion) and broaden its operations as part of a package of measures to contain the eurozone debt crisis. Incoming ECB president Mario Draghi signalled on Wednesday the bank was ready to carry on buying bonds, suggesting he was prepared to intervene to steady markets.
In the poll, traders also forecast the ECB will allot 191 billion euros ($271 billion) at its next weekly refinancing operation as banks continue to grapple with funding stresses. Forecasts from the 22 respondents ranged from 150 billion to 200 billion euros.
The ECB allotted 197 billion euros at its 6-day auction on Tuesday, close to the median expectation of 196 billion euros in a Reuters poll.
"We have plenty of funds in the markets so some of the banks will not need as much money this time," said a money market trader. Banks took a modest 57 billion euros on Wednesday in the first of two new offerings of one-year loans by the ECB designed to give institutions greater funding security and neutralise the threat of a new credit crunch.
Three-month Euribor rates, traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending, rose on Friday to a new 2-1/2 month high of 1.592 percent from of 1.590 percent.
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