- European government bonds closed slightly higher yesterday, retracing some earlier lows in what was a relatively quiet trading session. - With no major economic releases scheduled for the session the focus for the EGBs is likely to fall upon CPI data in the US, as well as minutes from the Federal Reserve's last policy setting meeting, scheduled for release at 8:30 ET and 14:00 ET respectively. - In a newspaper interview published yesterday the ECB's Mersch said that the Euro-Area may not need accommodative rates. Furthermore Mersch said that the ECB will probably boost its 2007 growth forecast, but expects only a small increase. - Italy announced overnight that they would be selling a 7-year floating rate note, a 10-year 4% bond, a 3-year 4% bond, and a 2-year zero coupon bond all on February 27. - Over in the UK gilts closed lower, but retraced some of their earlier losses. Gilts traded lower mid-way through the session after the DMO 2037 I/L gilt auction covered 1.97x, well below the neutral call of 2.58x. - The focus in today's session will be the release of the Bank of England minutes from the February policy meeting where the Bank of England left rates unchanged at 5.25%. Most analysts seem to expect that the vote to keep rates unchanged was unamious, and anticipate that the BOE will indicate at least one further interest rate hike in 2007.