Monday, producer prices in the euro area showed the biggest annual decline in 10 years, signaling risk of deflation in the economy. At the same time, retail sales registered a record fall in February as rising unemployment impaired consumer spending.

Elsewhere, the European Central Bank Governing Council member Lorenzo Bini Smaghi said the euro area should speak with one voice on exchange rate issues in all international institutions.

Eurozone

Eurozone producer prices showed an annual decline of 1.8% in February versus January's 0.7% drop, the Eurostat said. This was the largest fall since April 1999. For the annual variation, economists were looking for a 1.5% fall. Industrial producer prices slid 0.5% month-on-month in February, following a 1.1% decline in January. Monthly number matched economists' expectations.

In a separate communiqué, the Eurostat said retail sales in the 16-nation bloc slipped by a record 4% in February on a yearly basis. Retail sales decreased by a revised 1.7% in January and the consensus forecast was for a 2.5% decline in February. While, retail sales of food, drinks and tobacco slid 3.7% in the euro area, non-food sales dropped 3.7%.

Retail sales volume fell 0.6% in February from the previous month. Economists were expecting retail sales to drop just 0.4% in February after rising 0.1% in January.

Speaking at a conference entitled Towards a European Foreign Economic Policy organized by the European Commission in Brussels, Bini Smaghi said, It is my conviction that a unified representation of the euro area countries at the IMF would strengthen the exchange rate policy of the euro.

He said there is a need for verbal discipline when making statements on exchange rate. Only the President of the ECB and the President of the Eurogroup should comment on the exchange rate of the euro. The authorities which are not mandated to speak should heed the adage: silence is golden.

Statistics Finland announced that the number of new motor vehicle registrations declined 10% year-over-year to 18,709 in March. Meanwhile, new automobile registrations totaled 12,655.

The Statistical Service of the Republic of Cyprus said the harmonized index of consumer prices increased 0.9% year-over-year in March, compared with a 0.6% rise recorded in the previous month.

In a separate report, the statistical office said the number of unemployed persons in Cyprus stood at 16,806 persons in March, up from 16,383 persons recorded in the previous month.

Rest of Europe

New car registrations in the UK plunged 30.5% in March to 313,912 units, the Society of Motor Manufacturers and Traders or SMMT revealed. In the first three months of the year, market fell 29.7% or 200,000 units.

Russia's Federal Statistics Service announced that the consumer price index or CPI rose 14% year-over-year in March, compared with a 13.9% increase in the previous month. A year ago, the CPI was up 13.3%.

A report from the Czech Statistical Office showed that the trade surplus stood at CZK8.69 billion in February, up from CZK3.46 billion in the prior month.

Romania's National Institute of Statistics announced that the producer price index or PPI rose 6.2% year-over-year in February, slower than the 6.9% increase in the previous month. On a monthly basis, the PPI rose 0.6% after rising 1.9% In January.

Separately, the statistical office said Romania's average nominal wages rose 0.2% month-on-month in February to 1,358 lei.

The National Bank of Serbia lowered its key policy rate by 150 basis points to 15% after keeping the rate at 16.5% in March.

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