Evidence of faltering EMU growth increases concern that the European Central Bank is cutting interest rates too slowly, convincing some investors to steer clear of euro-denominated assets. Comments from euro-region bankers have reinforced the suspicion that the ECB will disappoint investors looking for a rate cut Thursday. ECB council member and Bundesbank president Ernst Welteke said he doesn't expect a recession in Germany this year, appearing to downplay the need for immediate rate cuts. He said that politicians overestimate the punch of monetary policy and that economic developments do not depend on interest rates going 25 basis points this way or that.

As new economic data become available investors need to be cautious in jumping to conclusions, especially if the data reflect immediate shock reactions to the September 11 events.

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