- European government bonds spent most of yesterdayâs session just below the unchanged level, but gained support upon the FOMC rate announcement and statement, pushing them to closed just above the unchanged level. - Midway through yesterdayâs session in his testimony to parliament the ECBâs Trichet said that risks to price stability exist over the medium to long term. Trichet reiterated that wages pose an inflation risk, and noted that the ECB will monitor wage deals closely. - With no major economic numbers, no speakers, and no new-supply scheduled during todayâs session, focus is likely to fall upon technical trading as well as further comments from the slew of Fed speakers scheduled to speak in the US today. - Over in the UK gilts closed just on the underside of the unchanged level. Gilts gained support early on after the results from the BOE minutes surprised investors, but eventually gave up gains as the session progressed. - The Bank of England minutes from the March 8 policy-setting meeting, which were released yesterday, showed that the BOE's monetary policy committee voted 8 to 1 to keep rates unchanged at 5.25%, with Blanchflower representing the dissenting voter. While most analysts anticipated that Sentance and Beasley would represent the dissenters, voting for a rate hike in a 7 to 2 vote to keep rates unchanged, the BOE's Blanchflower voted for an interest rate cut at the March 8 meeting. Blanchflower said that wage pressures in the UK are benign, upside risks from wage growth are diminishing, and that there is a considerable spare capacity in the labor market. - In yesterdayâs budget statement the UKâs Gordon Brown said that he sees CPI falling to 2.0% in 2007, and remaining near its target level in 2008 and 2009. Brown also reiterated his 2008 GDP forecast of 2.55% to 3.0%. - The focus in todayâs session will fall upon retail sales for the month of February, which are expected to rise to 0.6% m/m from a four month low in January; y/y retail sales are seen rising to 3.8%. Retail sales are due out at 5:30 ET. Additional focus will fall upon CBI industrial trends for the month of March, due out at 7:00 ET. - As expected the FOMC left interest rates unchanged at 5.25% yesterday. In its statement the Fed dropped its tightening bias, but indicated that it still expects economy to expand at a moderate pace. The Fed said that the adjustment in housing sector is ongoing; in last monthâs statement the Fed indicated that there were some signs of stabilization. The Fed said that core inflation is somewhat elevated; In last monthâs statement the Fed said that core inflation improved modestly. The Fed indicated that they continue to believe that inflation risks represent the primary policy concern. Once again, the Fed indicated that it is still data dependent.