Euro zone economic figures due out this week are expected to show the crucial German economy remains weak, according to economists.
They predicted the pivotal German Ifo business climate index for August, to be published on Wednesday, would fall for the third consecutive month.
"The German Ifo survey for August is the most keenly awaited item on the euro zone data calendar, not least because the German ZEW survey suffered its largest fall for two years in that month," Royal Bank of Scotland economist Mr Geoffrey Dicks, said.
The 25.7-point drop in the ZEW economic expectations index in August was the steepest decline in two years and much sharper than expected.
"Germany remains the sick man of Europe and needs lower interest rates," Mr Dicks said.
Bank of America analyst Mr Lorenzo Codogno said the question is whether the index will remain on a downward spiral or whether the recent falls will prove to be a shortlived response to equity weakness.
In July, the Ifo's confidence index fell for the second month in a row, casting a cloud over the prospects for recovery in Europe's biggest economy.
AFP