The recent weakness in economic data across the Eurozone is expected toresult in a quarter-point rate reduction when the European Central Bank meets this week. The troubled southern European countries have been experiencing negative growth rates for some time, but over the last few weeks, it appears that this economic sluggishness is affecting the northern countries as well. The latest purchasing manager data from Germany signaled contraction, and France’s 3.5mm unemployed stands as the highest number on record. As we move through earnings season, U.S. companies from IBM to Whirlpool are feeling the pinch from lower European sales. Going forward, the question facing policy makers is how long can the forced austerity measures, aimed at shoring up fiscal positions, remain in place? If these measures are relaxed, will the debt of troubled European countries like Italy and Spain give up their recent gains and return to their yield highs of last year? We see no immediate end to the problems facing Eurozone leaders and as such, our accounts will likely continue to be “Euro-lite” in regards to positioning.