Tuesday, Eurozone producer prices in March recorded the biggest annual fall in 22 years, adding more pressure on the central bank to cut its key rate this week. Elsewhere, Swiss consumer confidence deteriorated more than expected in the second quarter to the lowest level since 2003 as the sentiment was weighed down by rising concern over job security.


According to a report released by European Union statistics agency Eurostat, industrial producer prices slipped 3.1% annually in March, larger than the revised 1.7% decrease in the prior month. The annual decline in March was larger than the expected 2.9% decrease and the biggest since February 1987. Month-on-month, producer prices declined 0.7% in March compared with a 0.4% drop in February. Economists were expecting a monthly 0.6% fall.

A report by Spain's Labor Ministry showed that the number of registered unemployed grew by 37,542 persons or 1.6% in April. On the same day, the Instituto de Crédito Oficial, or ICO, said consumer confidence in Spain increased for the second consecutive month in April, with the index rising to 61.9 from 53.7 in March.

The Bank of Finland said the current account surplus was halved in 2008 due to weakening goods trade and income account.

The Statistics Austria said in a report that the trade deficit stood at EUR 0.72 billion in the January to February period, down from EUR 0.31 billion surplus in the preceding year.

Rest of Europe

UK's small and medium sized manufacturers recorded a sharp decline in total new orders and output volume, the latest quarterly SME Trends survey conducted by the Confederation of British Industry showed. However, firms expect the pace of fall to moderate slightly over the coming three months.

Elsewhere, reports said citing data from the Markit Economics that the CIPS/Markit construction purchasing managers' index for the UK jumped to 38.1 in April from 30.9 in March, marking the highest reading in seven months.

A quarterly survey from Switzerland's State Secretariat for Economic Affairs revealed that the consumer sentiment declined to minus 38 points in April quarter from minus 23 reported in the previous quarter. Thus, the reading stood below the expected level of minus 25 and at the lowest level since 2003.

The minutes of the monetary policy meeting of Riksbank held on April 20 revealed that the interest rate is expected to stay at a low level until the beginning of 2011. If Swedish economic activity deteriorates more than expected in the future, the Riksbank has the possibility to take other measures, the minutes showed.

Romania's National Institute of Statistics announced that the producer price index or PPI rose 3.9% year-over-year in March, slower than the 6.2% increase in the previous month. Month-on-month, the PPI dropped 0.6% in March, in contrast to a 0.6% increase in February.

Poland's government reportedly slashed its economic growth outlook. The government now expects the economy to grow 0.5%-1%, down from an initial estimate of 1.7% growth.

Also on Tuesday, Serbia's central bank retained its key policy rate at 14%.

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