The European Central Bank meets today with economists holding out little hope of an interest-rate cut this time but expecting signals the bank is getting ready for a move - maybe as soon as this month.
ECB President Mr Wim Duisenberg is expected to start signalling a shift to an easing bias at his monthly news conference today - backed by news of slowing euro zone inflation and meagre growth in Germany.
Some economists see an outside chance of a rate cut today but most expect the ECB will wait for further evidence that headline inflation, still above the euro zone's two per cent ceiling, is coming down. It slowed to 2.4 per cent in January.
Economists said Germany's slowdown to 0.2 per cent cast a shadow on Europe's largest economy in 2001.
"These numbers have chopped to pieces all forecasts for 3 per cent growth [this year]. I think we are now looking at a figure of 2 per cent," said Nomura International economist Mr Adolf Rosenstock.
"So the ECB has no time to lose. But I think they will wait maybe between two and four weeks before they cut rates," he added.
But economists say inflation is easing and that the ECB cannot ignore the worsening global outlook.
Today's news conference looks set to reveal a further shift downwards, several economists said.