In the euro zone, economists expect the ECB to continue holding rates at 4.00%. Markets will also be listening to what ECB President Jean-Claude Trichet has to say at his press conference following the interest rate announcement.

Jacques Cailloux from RBS said he expects Trichet will not remain as hawkish as he was at April's press conference. He added that although Trichet will continue to focus on inflation, he won't be able to ignore slower economic growth.

"We think that in the coming months, as the economic data continues to come in on the low side, the ECB will be forced to recognize that the economy is losing more momentum than expected and that should prompt the ECB to revise downward its 2009 growth forecast as early as next month and that could open the door for some cuts," he said. "We do think that the odds of an easing sooner than expected are higher than what the markets are currently pricing in."

Across the channel, economists expect the Bank of England to hold interest rates at 5.00%.

Mitul Kotecha, strategist from Calyon, said that he is expecting the central bank to hold rates, but given the recent weaker data, there is increased pressure for a cut.

"Having cut rates the previous month, there may be a case for the bank of England to wait for more news before they cut again," he said "I think it's only a matter of time. If they don't cut tomorrow, they will do it next month."

Ahead of the central bank announcements will be German trade data. Imports are forecasted to fall 0.4% following February's revised decline of 0.6%. Exports are expected to remain unchanged following February's revised dip of 0.2%.

All times in EDT

Thursday

2:00 EU German Trade Balance March Exp: 16.9B Prior: 16.9B

2:00 EU German Current Account (EURO) March Exp: 16.2B Prior: 15.4B

2:00 EU German Imports (Monthly) (SA) March Exp: 0.8% Prior: -0.4% Revised: -0.6%

2:00 EU German Exports (Monthly) SA) March Exp: 0.5 Prior: 0.0 Revised: -0.2%

6:00 EU German Industrial Production (Annualized (NSA WDA) March Exp: +4.8% Prior: +6.1%

6:00 EU German Industrial Production (Monthly) (SA) March Exp: -0.5% Prior: +0.4%

7:00 UK Bank of England Interest Rate Decision Exp: 5.00% Prior: 5.00%

7:45 EU European Central Bank Announces Interest Rates 8-May Exp: 4.00% Prior: 4.00%

8:30 EU ECB's Trichet to speak at monthly press conference

By Neils Christensen, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it