Forex Flash: ESM launched, attention turned to Greece – UBS (Barcelona) - The monthly meeting of Eurozone finance ministers ended with little fanfare. As expected, Europe's new bailout facility - the ESM - was formally launched. According to Gareth Berry, a Research Analyst at UBS, “Eventually the ESM will take over from the EFSF, however both facilities are scheduled to run in tandem for at least a year, providing a combined firepower of €700B.”

In addition, the headlines on Greece sounded more accommodating than usual. Greece's finance minister emerged from the meeting noting that an extension to Greece's adjustment program is now on the table, although no agreement has yet been reached on this point. Even Eurogroup Chair Juncker conceded that he was impressed by the performance of the new Greek government and its willingness to push through reforms.

“Germany's Chancellor Merkel is due to meet Greece's Prime Minister Samaras in Athens to today, however we do not expect any announcement on whether Greece will receive its next aid tranche until the troika has finished its quarterly review.” Berry adds. Policymakers are likely to command the headlines again today with an appearance by ECB President Draghi before an EU parliamentary committee. Bank of England Governor King is also due to reflect on the subject of inflation targeting during his speech this evening.