- European government bonds closed lower yesterday after preliminary GDP figures showed that growth in Europe was stronger than expected, boosting the odds of another interest rate hike. - With no major economic data in the session focus will fall upon a speech made by the FED's Bernanke at 10:00 ET today. - Additional focus will fall upon results from an Italian bond auction. Italy is set to sell â¬2.5B in 3.75% 5-Year, and â¬.5B in 3.75% 15-Year bonds. Results are due just after 5:00 ET. - The ECB's Weber said yesterday that he sees German inflation close to 2.0% on average this year. Weber expects a slight dip in growht during the first quarter. Weber anticipated that a continued pickup in employment will support consumption, and forecasted GDP growth of 1.75% in 2007, and 2.0% in 2008. - In the UK gilts closed higher after inflation data fell below estiamtes with some of the M/M figures falling to multi-year lows. - The focus in today's session will be wage and employment data as well as the BOE's quarterly inflation report, due out at 4:30 ET and 5:30 ET respectively. - Recall that, in the previous BOE inflation report, the BOE said that inflation is seen returning to its target faster than anticipated. The BOE said that it saw CPI peaking at 2.7% in 2007, and that it expects CPI at or below 2.0% in two years. The BOE said that the pick-up in RPI inflation may lead to wage pressure, and noted that risks to growth and CPI were broadly balanced. - According to some analysts, the BOE's inflation report is expected to show that January's interest rate hike will not be the last despite yesterday's inflation data. - The FED's Bernanke is set to testify on monetary policy in front of the senate today. Traders are awating any comment indicating that inflation is still a risk to the US economy. Many anticipate that Bernanke will indicate that rates will remain on hold at 5.25% for at least six months.