- European government bonds closed lower in yesterday's session ahead of a busy week on the economic front. The Euro-Bund future fell to a two-week low during yesterday's session. According to some analysts the Euro-bund is seen hitting 114 the figure before gaining any sustainable long term momentum. - In a session packed full of economic data there will not be one single focus. One highlight will be preliminary Q4 GDP figures for Germany, France, Spain, Italy, and the Euro-Zone. In all cases the Y/Y figures are seen rising compared to the previous quarter; Some Q/Q figures are seen remaining unchanged while others are expected to rise. - In Germany the Zew current situation is seen falling to 66.5 from last month's all time high of 70.6. Economic sentiment is expected to rise to 5.0 from last month's -3.6. In the Euro-Zone economic sentiment is expected to rise to 3.0 from -1.8 last month. The ZEW data is due out at 5:00 ET. - The EU will release its Euro-Zone GDP forecasts today. While there are no estimates, the EU previously forecasted Q4 2006 in a range of 0.3%-0.7%, Q1 2007 in a range of 0.3%-0.8%, and Q2 2007 in a range of 0.3%-0.9%. The previous forecasts were published in November. The EU forecasts are due out at 5:00 ET. - Just towards the European close the EU's Juncker forecasted Euro-Area GDP growth of 2.0%-2.3% in 2007. Juncker said that he sees inflation risks coming from oil prices. Juncker expects that employment will grow in 2007, and cited wage restraint for good economic prospects. - Ahead of the US open the EU's Almunia said that the Euro-Area is in a clear state of recovery. Almunia expects that growth will accelerate after the first quarter. Almunia cited oil prices and wage development as inflation risks as well as money-supply growth. Finally, Almunia said that nations need to hold common positions before the ECB can attack. - Over in the UK gilts were relatively unaffected by lower than expected input price data, and closed lower in the session. - The focus in today's session will fall upon inflation data for the month of January. While CPI data is expected to cool down slightly from December, RPI Y/Y is expected to rise to 4.5% from 4.4%. If RPI Y/Y reaches 4.5%, that would be the highest since December of 1991. Additionally Core CPI Y/Y and RPI Ex-Mortgage Y/Y are expected to remain unchanged from December at 1.8% and 3.8% respectively. The inflation data is due out at 4:30 ET. - Note that the Bank of England's quarterly inflation report is due out during tomorrow's session. Recall that over the weekend the London Times published an article which anticipates that the BOE will predict a sharp drop in inflatin, but leave the door open for further interest rate hikes in the event that wage hikes heat up inflation. The article also anticipates that the upcoming BCC report will predict that inflation is set to slow down as the past three rate hikes are absorbed. Today's inflation data will serve as a precursor to the BOE's quarterly inflation report.