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The European Central Bank taketh away and the European Central Bank giveth.

Yesterday, June 29, worries that the European Central Bank’s decision to end a $543 billion one-year special liquidity program would send European banks into a new crisis started a global stock market selloff. (For more background see my post )

Today, news that European banks asked the European Central Bank for just $162 billion in three-month loans has fueled an early rally in European stocks and the euro.

Analysts had projected that banks would need to draw down as much as $360 billion from the central bank.

 Today’s offering by the European Central Bank was seen as a kind of preview of the bank stress tests that European governments will report in mid-July. If banks had drawn down something like the $360 billion high-end estimates in new three-month money, markets would have taken that as a sign that banks are still having an extremely tough time raising money in the financial markets.

 So today’s relatively smaller $162 billion draw by banks on the central bank is being seen as a sign that some banks at least are able to tap the financial markets for the cash they need.

 European banks need to refinance that $543 billion under the European Central Bank’s expiring 12-month liquidity program tomorrow.

 This morning the euro was up 0.6% against the U.S. dollar to $1.2266 as of 8:45 ET in New York.