Bad news was breaking out all over Europe last week. Volkswagen AG predicted a "significant" decline in worldwide car sales. A French report said consumer spending declined in February at the fastest pace in six months. Stock indexes plummeted in Europe's eight biggest markets. The euro hit a three month low against the dollar.

At last there appears to be a change of sentiment at the ECB ahead of Thursday's meeting. For example, Bank of France governor and ECB council member Jean-Claude Trichet said that the European Central Bank is less worried about inflation now, suggesting the bank may cut interest rates soon to stop EMU economies from stalling. Until this week, policymakers have cited concerns about rising prices in delaying a rate cut, even as growth slackened. Markets have slid and companies said weakness in the United States will crimp sales and profits. While inflation has exceeded the central bank's ceiling of 2 percent for nine months, money supply growth has slowed, giving the ECB room to reduce borrowing costs. However, countering Trichet's comments were those of Ernst Welteke, Bundesbank president and ECB council member. Welteke said he was against "hectic" monetary policy decisions by the ECB, stressing that the central bank needed more data before deciding whether to cut rates in the near term. Tune in Thursday to find out what happens.

Introduction   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead