- European government bonds posted their biggest drop in nearly three months last week on increasing speculation that the ECB will continue to maintain a tightening policy in 2007. EGBs slumped on Friday after stronger that expected existing home sales data in the US. - In a light session on the economic front focus is likely to fall upon the release of confidence data due out of France at 2:45 ET as well as technical trading. Additional focus will fall upon comments from the ECB's Liikanen and Liebscher who are scheduled to speak at 2:45 ET and 11:00 ET respectively. In new supply the Belgian Treasury is set to sell â¬3.3B in OLO bonds at 6:00ET. - According to Sueddeutsche Zeitung, the International Monetary Fund will say in its latest World Economic Outlook that further depreciation by the U.S. dollar is needed to help correct global imbalances. - Gilts closed lower in the UK on Friday, continuing to decline on Thursday's stronger than expected retail sales and CBI industrial trends data. - Home Track published its March house price data overnight. According to Home Track March house prices rose by 0.8% m/m and 6.7% y/y. Y/Y house prices reached their highest level since June of 2003. - With no economic releases scheduled in today's session focus is likely to fall upon technical trading, as well as comments from the BOE's Gieve who is set to deliver a speech at 12:00 ET. - In Fed speak, the Fed's Mishkin said late on Friday that he expected Core PCE to settle at around 2.0%, noting that he expects that inflation will slow at a gradual pace.