After receiving 530b euros of fresh funds from the ECB, European banks immediately redeposited 300b of it right back at the ECB. Total overnight deposits at the ECB now total 777b euros up from 475b yesterday. After 11 straight days of drops for Spanish bond yields, they are rising today after Spain’s PM said their budget deficit target is 5.8% of GDP, above the agreed level with the EU of 4.4%. This is not new news but Spain was hoping the EU would give them more breathing room but the Germans would have no part in that. Italian bond yields have also stopped falling for the 1st day in 6 as their 2011 budget deficit as a % of GDP came in at 3.9%, a touch below expectations of 4.0%. The rising price of oil showed up in the Euro zone PPI for Jan as overall prices rose .7% m/o/m, the biggest gain since April as energy prices rose 2.2% m/o/m. With brent crude up another 10% in Feb, this upward trend will continue. From an economic impact standpoint, comparing this move higher firmly above $100 with the one in ’08, both are being lifted by global easing but the main difference is this time is due to supply constraints, the bad kind as opposed to strong demand that was seen in early ’08 before everything hit the fan in late ’08.