European Central Bank policymakers began meeting today and are expected to keep interest rates on hold despite an unexpectedly sharp drop in inflation and slow growth.
Financial markets will scour the policy statement read by ECB president Mr Jean-Claude Trichet for any hint of easier credit ahead now that the central bank appears to have reached its goal of price stability much faster than expected.
"If Trichet doesn't mention that rates are appropriate, it immediately will be an invitation to speculate on a rate cut at the next meeting. That's the thing to watch," said Mr Joachim Fels, an economist at Morgan Stanley in London.
Analysts said Mr Trichet was most likely to deliver an unchanged message that interest rates at their current historic low of 2 per cent are sufficient both to keep prices stable and allow the economy to gradually return to cruising speed.
The ECB interest rate announcement is due at 12:45 p.m. with Mr Trichet's news conference to explain the decision at 1:30 p.m.
The Bank of England is also expected to hold rates steady at 4 per cent today.