Monday, Eurozone economic sentiment hit a fresh low in March, but confidence weakened more slowly than in the first two months of 2009 amid signs of stabilization in some sectors. Meanwhile, the Spanish central bank took over the management of a troubled regional savings bank, the first such rescue move in 16 years. Further, the Spanish EU harmonized consumer price index declined in March from the previous year, an official report showed. Thus, Spain became the first nation in the EU 16 to report a year-on-year slide in consumer prices.

Outside the Eurozone, the World Bank said the Russian economy would contract in 2009 as the worst global recession since the World War II took its toll on the country and the number of poor people will increase due to rising unemployment. Elsewhere, a survey showed that the UK financial services sector is expected to axe another 15,000 jobs in the next quarter.

Eurozone

A monthly survey carried out by the European Commission showed that the economic sentiment index unexpectedly dropped to 64.6 in March from 65.3 in February. Economists were looking for a reading of 65.8. The indicator stood at its lowest level since the series began in January 1985. The fall in the index was attributed to the deteriorating sentiment in the industry and services sectors.

The Bank of Spain replaced managers of the Caja Castilla La Mancha and took over its administration. The government also provided a guarantee of up to EUR 9 billion or US$12 billion of the liabilities.

A flash estimate from the Spanish statistical office INE revealed that the harmonized index of consumer prices, or HICP, fell 0.1% year-on-year in March, marking the first decline since 1961. In February, the indicator was up 0.7%.

Belgium's National Institute of Statistics said the consumer price index or CPI rose 0.62% year-over-year in March, slower than a 1.93% increase in the previous month. The March inflation was the lowest level Sine December 1998.

The Statistics Netherlands said the industrial producer prices decreased 10% year-over-year in February, after falling 9% in January.

The General Secretariat of the National Statistical Service of Greece revealed that the industrial production dropped 10.2% year-over-year in January, compared with a 0.6% fall in the previous year.

Rest of Europe

A survey conducted by the Confederation of British Industry and PricewaterhouseCoopers showed that a balance of 40% of UK's financial services firms reported a reduction in headcount, while the numbers employed in the sector fell at the heaviest rate since June 1993. A negative balance of 38% forecast employment to decrease over the next three months.

The average price for a home in England and Wales plummeted by a record 10.3% on-year in March, property industry group Hometrack said, following a 10% fall in February. The average selling price was 156,100 pounds in March, marking the largest decline since the group started tracking home prices in 2000.

UK M4 money supply increased 1.4% month-on-month in February, unrevised from the preliminary estimate, after rising 2.4% in January, a final report from the Bank of England showed.

The central bank also reported that mortgage approvals in the UK totaled 37,937 in February, up from 31,791 in the previous month. Economists expected mortgage approvals to come in at 34,000.

In other news, UK's Nationwide Building Society acquired core business of Dunfermline Building Society. The deal followed a sale process carried out by the central bank over the weekend under the Special Resolution Regime provisions of the Banking Act 2009. All of Scottish building society's staff have been transferred to Nationwide.

Elsewhere, UK Business Secretary Peter Mandelson urged the public must to end criticizing banks in order to allow the proper functioning of the financial system.

Hungary's jobless rate increased to 9.1% in the December to February period from 8.4% in the previous three-month period, the country's Central Statistical Office said.

Statistics Norway announced that the retail sales volume excluding motor vehicles dropped a seasonally adjusted 0.3% month-on-month in February, reversing a 0.6% rise in the previous month.

The Bank of Estonia said the current account deficit stood at EEK3.3 billion in the fourth quarter, narrowing from a EEK4.61 billion deficit in the third quarter. The central bank said the current account deficit was the lowest in three years.

Lithuania's consumer confidence indicator stood at minus 51 in March, at the same level seen in the previous month, a report by Statistics Lithuania revealed.

Latvia's retail trade turnover at constant prices decreased a working day adjusted 25.3% year-on-year in February, Statistics Latvia said.

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