- European government bonds closed slightly higher yesterday as traders anticipate today's interest rate decision as well as comments from the ECB's Trichet. - The focus in today's session will be the ECB interest rate decision due out at 7:45 ET. A recent poll of 48 analysts showed that all 48 analysts see the ECB keeing interest rates unchanged at 3.50%. - Later on traders will focus on comments from the ECB's Trichet, which are due out at 8:30 ET. - Pimco's Wildfoerster spoke about the recent demand for a 6.5% increase in wages by IG Metall in Germany. Wildfoerster said that the 6.5% demand may lead to an actual wage hike of 3.5% for the metalworking and engineering sector, which covers around 3.4M workers (approximately 4.1% of the German population). Wildfoerster pointed out that German wage hikes have lagged behind the average rate in the Euro region over the past couple of years. Finally, Wilffoerster said that he believes that the ECB can live with a 3.5% wage hike, but noted that if similar demands spilled over into other sectors, demand could breach tolerance levels. - According to some analysts EGBs are seen drifting lower ahead of the ECB's post decision press conference on speculation that the ECB will indicate that at least one interest rate hike will be necessary within the coming months. - Gilts closed higher in the UK yesterday ahead of today's interest rate decision. Traders were a bit cautious ahead of today's descision, slightly shaken by last month's surprise decision. - The Bank of England will announce its interest rate decision at 7:00 ET today. The BOE is expected to keep rates unchanged at 5.25%. Although the general consensus is that the BOE will keep rates unchanged, in a recent poll 8 out of 50 surveyed economists forecasted that the BOE will raise rates by 25bps. - Recall that the last BOE decision was split in a 5-4 vote, with some BOE members disagreeing on where the risks to inflation were. The BOE's King recently said of the surprise decision that it was a pre-emtpive strike to prevent further inflation. - Additional focus may fall upon Halifax house prices due out in the UK at 3:00 ET today. The y/y which reached its highest level since March of 2005 at 9.9% in December is seen falling to 9.6% in January. - Overnight the NIESR GDP estimate for the month of January was released. The GDP estimate was 0.8%, above estimates of 0.7%. The prior number was revised up to 0.8% from 0.7% as well. - In addition to the BOE and ECB interest rate decisions note that the Sedlabanki will announce a rate decision at 4:00 ET. The Sedlabanki is expected to keep rates unchanged at 14.25%; The Chile central bank will announce a rate decision at 18:00 ET. The Chile central bank is expected to keep rates unchanged at 5.00%.The Peru central bank will announce a rate decision at 18:00. The Peru central bank is expected to keep rates unchanged at 4.50%.