On Thursday, the ECB Council will hold its regular monthly meeting. Having raised the refinancing rate only a month ago, there is no policy action to be expected. The German trade balance might have decreased in February, whereas the German current account and industrial production from the EMU, France and Italy probably all increased.

EMU, French and Italian industrial production probably all rebounded in February. However, the recovery in France is likely to have been limited, as the correlated indicators deteriorated. EMU industrial production from January might be revised down, just like the corresponding German figure. The German trade balance could have deteriorated in February, while the current account is expected to have improved. Q4 2006 EMU GDP is unlikely to be changed significantly when revised, but the EU Commission??™s GDP growth forecasts might be revised upwards, as economic sentiment has improved again recently.

The ECB will leave its main refinancing rate at 3.75% on Thursday. The latest economic data for the euro area turned out somewhat stronger than expected by most analysts. However, these numbers are still in line with the ECB growth projections published in March, which were rather optimistic. At the same time, global economic perspectives have become slightly more clouded with respect to developments in the US. Overall, we expect the ECB to retain its hawkish wording, stressing the necessity to ???monitor very closely???.