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European consumer sentiment weakened sharply in March, with the consumer confidence indicator at -16.3, underscoring a more fragile household mood across the region. The European Commission said its March flash estimate showed confidence falling markedly and reaching its lowest level since October 2023, highlighting renewed pressure on the consumer side of the economy.

Source: European Commission, DG ECFIN — Flash Consumer Confidence Indicator for the EU and euro area.

France’s latest short-term debt auction showed higher borrowing costs across the curve. The 3-month BTF yield rose to 2.226%, the 6-month yield climbed to 2.412%, and the 12-month yield increased to 2.585%. The move suggests investors demanded a higher return to hold short-dated French paper, reflecting firmer money-market pricing and tighter short-end financing conditions. Source: Agence France Trésor (AFT) — Latest BTF auctions.

Spain’s trade balance improved in January, with the deficit narrowing to -4.00B from -5.57B previously. The smaller gap suggests some improvement in the external sector, potentially driven by stronger exports, softer imports, or both, offering a more supportive start to the year for the Spanish economy.

Source: Spain Ministry of Economy, Commerce and Business — Secretary of State for Trade, International Trade Report / official foreign trade release based on Customs-declared trade data.

The eurozone’s January trade data delivered a major downside surprise. The trade balance fell to -€1.9 billion, missing the €12.8 billion forecast by a wide margin and reversing from the previous €11.2 billion surplus. The sharp swing suggests the region’s external trade position weakened significantly at the start of the year. In practical terms, the data points to either weaker exports, stronger imports, or a mix of both, and signals a much softer trade backdrop than markets expected.

Source: Eurostat

Italy’s January trade data showed a mixed external picture. The country’s trade balance with the European Union improved to -€1.14 billion from -€2.49 billion, suggesting a smaller deficit in trade with EU partners. But the broader total trade balance weakened sharply to just €1.089 billion, far below the €5.650 billion expectation and down from €5.993 billion previously. The message is that while Italy’s trade position inside the EU improved, the overall external surplus narrowed much more than expected, pointing to softer trade momentum at the start of the year.

Source: Istat

The euro area’s January external-balance data came in stronger than expected. The current account surplus rose to €37.9 billion, well above the €17.2 billion forecast and also higher than the previous €14.6 billion. However, the non-seasonally adjusted current account came in at €13.0 billion, down from €34.6 billion previously. The seasonally adjusted figure points to a much stronger external surplus at the start of the year, even though the non-adjusted reading softened.

Source: European Central Bank

Germany’s February producer-price data showed upstream inflation remained firmly negative. PPI fell 0.5% month-on-month, weaker than the 0.3% forecast, although slightly less negative than the previous 0.6% drop. On an annual basis, producer prices fell 3.3%, deeper than both the 2.7% expectation and the previous 3.0% decline. The data suggests pipeline price pressure in Germany remains very soft, reinforcing the view that disinflation is still strong at the producer level.

Source: Destatis

The European Central Bank left all of its main policy rates unchanged in March. The deposit facility rate remained at 2.00%, the main refinancing rate stayed at 2.15%, and the marginal lending facility was kept at 2.40%. The decision was fully in line with expectations and signals that the ECB is choosing policy stability for now while monitoring inflation, growth, and broader financial conditions.

Source: European Central Bank

Construction activity in the euro area weakened at the start of the year. Construction output fell 0.09% month-on-month in January, reversing from the previous 0.67% increase. The data points to a loss of momentum in the building sector and suggests the recovery in construction remains fragile.

Source: Eurostat

Eurozone labor-cost data showed a modest easing in wage pressure at the end of the year. Wages in the euro area rose 3.00% year-on-year in Q4, down from 3.20% previously. At the same time, the Labor Cost Index slowed slightly to 3.30% YoY from 3.40%. The figures suggest wage-driven inflation pressure is still elevated, but the trend is gradually softening rather than accelerating again.

Source: Eurostat

Spain’s latest debt auctions showed a clear rise in government borrowing costs. The 10-year Obligacion auction cleared at 3.476%, up from 3.167% previously. The 5-year Bonos auction rose to 2.934% from 2.577%, while the 7-year Obligacion auction increased to 3.079% from 2.863%. The broad rise in yields suggests investors demanded higher returns across multiple maturities, pointing to firmer funding costs and a tighter market tone in Spanish sovereign debt.

Source: Tesoro Público (Spanish Treasury)

The Swiss National Bank kept its policy rate unchanged at 0.00%, fully in line with market expectations and unchanged from the previous setting. The decision signals that the SNB is still comfortable maintaining an ultra-low rate stance for now, likely reflecting contained inflation pressure and a preference to avoid tightening financial conditions too quickly. For markets, the decision itself was no surprise, so attention will shift more toward the SNB’s guidance on inflation, the franc, and the timing of any future policy move.

Source: Swiss National Bank