The performance of the French OAT ten years assigned 3 basis points to 3

The publication yesterday the first estimate of inflation for the euro area in the month of March reporting a rise in prices limited to 1.6 provides an additional reason to the European Central Bank (ECB) to quickly lower interest rates. For the second month in a row, European prices showed an increase below the maximum threshold of 2 set by the ECB. At the same time, yesterday, the Institute of economic statistics European Eurostat has announced a very modest increase in March of euro-zone business climate, which barely found January levels. In retail, consumer morale continues to stagnate, which is not good news for the European economy.

These two indicators reinforce conditions for a monetary easing in Europe. But it is not certain that the Governor of the ECB Committee, which meets today in Frankfurt, decides as early as this afternoon to reduce its main rates of refinancing, currently set at 2. "If a decrease in the next few hours is possible, it is likely that it is rather decided at the meeting scheduled for early may, because, by experience, the ECB wants never give the impression to act in haste," argues Marc Touati, Chief Economist with Natexis Banques Populaires.

"Credibility problem".

In fact, only four banks on 45 interviewed by Bloomberg Agency provide a relaxing today. Among them, Barclays Capital: "the decision of whether to change interest rates will be hotly discussed at the meeting of the Governors, and if the Bank decides in fine should not be disturbed, it will be a short majority", indicate its economists. "A drop could even be decided at the last moment, on the basis of the detail in Germany in March sales figures, which will be published this morning."

Will whatever the final decision of the European Central Bank, its President Jean-Claude Trichet speech, expected at the end of the meeting of Governors be major importance for market operators. More still to the usual. Last week, the latter leaves break a beginning of concern about the economic recovery of the Continent which was slow to materialize while domestic consumption remains sluggish. "The ECB should solve a major problem of credibility, because if a decline in the rate is economically justified, it will be in all cases too late, to the extent it will virtually put a year before have concrete effects on activity," says Marc Touati. "That Jean-Claude Trichet must we say today, that is why when he finally appears to come to prepare the markets for a future relaxation, that is what has really changed in his economic diagnosis from the previous month where the economic situation in the euro zone was already very disturbing." Waiting for answers to these questions, bond markets have remained undecided yesterday. The performance of the French OAT ten years assigned 3 basis points to 3.99.

Ignoring the questions about the future strategy of the ECB, the European currency has confirmed its rebound began Tuesday. The euro was worth 1.23 dollar day, 1.22 dollar a day earlier. The single currency was initially benefited from strong skid of the greenback against the yen, which has been found in the morning its most senior levels since April 2000 (see below). In the afternoon, a strong rumour of crisis heart of Alan Greenspan, formally denied after an unusually long by the US Federal Reserve has created a slight panic around the American currency, which benefited from the euro to increase a few important technical thresholds.