- Euopean government bonds closed higher in yesterday's session tracking treasuries in the US after comments from the FED's Bernanke. - The Focus in today's session will fall upon the ECB' monthly report for the month of February, which is due out at 4:00 ET. Recall that in January monthly report the ECB reiterated the view that the policy remains accommodative, and that liquidity was ample. The ECB also said in January that risks to the CPI outlook remain on the upside, and reiterated that the ECB will act in a fimr and timely manner. - The FED reduced its 2007 GDP forecast to 2.5-3.0% from the previous forecast of 3.0-3.25%. Bernanke said yesterday that inflation is beginning to dimish, but said that the economy will continue to grow despite the current state of the housing market. - The German Economic Minister Glos said in an interview yesterday that he hopes that the ECB will take note of the lack of drastic inflation. - Gilts closed relatively flat in the UK yesterday. The Bank of England quarterly inflation report signaled that one more interest rate hike cannot be ruled out as a possiblity in 2007. - The focus in today's session will be retail sales for the month of January due out at 4:30 ET. On a M/M basis retail sales are seen falling to 0.2% from 1.1% in December, while current Y/Y forecasts anticipate a 5.4% reading. A Y/Y reading of 5.4% would be the highest since November of 2004.