- European government bonds closed lower in yesteday's session after data in the US showed a greater than expected rise in producer prices, but a weakening manufacturing sector. - Former FED Chairman Alan Greenspan said yesterday that sub-prime problems are not a small issue. Greenspan said that the remarkable housing slump has not hit spending. Greenspan said that he expects a spillover from sub-prime problems spreading to other loans. - With no major economic releases, and no new supply scheduled in the session focus will fall upon comments from the ECB's Weber who is scheduled to speak in Mumbai at 2:30 ET. - Over in the UK gilts also closed lower, in line with the wider market as investors moved out of bonds and back into equity. - The BOE's Sentance said yesterday that lower consumer spending is needed to curb inflation. Sentance said that business sentiment displays signs of recovery. According to Sentance, the BOE sees a risk of inflation undershooting the BOE's target noring that there are risks of higher inflation as a result of demand. Regarding global imbalances, Sentance said that global imbalance concerns may increase volatility. - With no economic numbers, no new supply, and no speakers scheduled, focus is likely to fall upon technical trading in today's session.