(RTTNews) - Monday, there was no major statistical report scheduled for the day in Europe. Central banks remained active, pumping in funds into money markets.

The outlook for the European Union labor market is expected to turn more unfavorable in the second half of the year, given the recent developments in the financial markets, the European Commission said in a report. In its quarterly European Union labor market review, the commission said recent economic slowdown has moderated performance in the overall EU labor market.

Eurozone

Welcoming the entry of Slovakia into Eurozone, the European Central Bank President Jean-Claude Trichet urged the nation to control inflation and to adopt more economic reforms to reap all the benefits of euro adoption. Slovakia is set to join Eurozone on January 1, 2009. Elsewhere, the European Commissioner for Economic and Monetary Policy Joaqu�n Almunia stated that Slovakia need to ensure that its strong determination in reforming its economy up to now translates into sound policies after euro adoption.

The European Central Bank allotted $40 billion in overnight US dollar auction against a bid amount of $82.105 billion. The latest bid amount was smaller than $96.72 billion on September 19 and $101.68 billion on September 18.

The General Secretariat of the National Statistical Service of Greece said the Material Costs Index in the construction of new houses increased at a faster pace of 9.3% year-on-year in August compared with the year-ago period’s 5.9% rise.

The Statistical Service of the Republic of Cyprus said construction material prices rose 0.16% month-on-month in August. Year-on-year, construction material prices were up 16.33%.

The Bank of Portugal said the January to July current account deficit stood at EUR11.1 billion compared with EUR7.98 billion deficit last year.

Rest of Europe

UK house prices continued to decrease for the fourth straight month in September, though the pace slowed compared to the previous month, a closely watched survey revealed. A monthly survey by the property website Rightmove showed that the average asking price for a home in Great Britain fell 1% in September from August, following a 2.3% decline in August. On an annual basis, home prices were down 3.3% in September compared with a 4.8% decline in August. Rightmove measured 115,657 asking prices of properties put on sale between August 10 and September 13.

The Bank of England said commercial property prices in the UK would possibly decline, before stabilizing around the middle of 2010. The commercial property market remained vulnerable and availability of financing for new transactions were difficult. In its quarterly bulletin, the BoE said, “Market contacts attributed this renewed weakness in the commercial property sector to concerns about the UK economy, and weakening tenant demand. They continued to report heavy use of ‘rent sweeteners’.”

In other news, the BoE revealed a bid amount of US$26.15 billion at its overnight US dollar repo operations. The amount on offer was $40 billion. The cover ratio was 0.65%. The central bank said the limit on the maximum total size of a participant’s bids has been amended to 20% of the funds offered. Further, data from the central bank showed that GBP5 billion was placed in its standing deposit facility on September 19. This was the first use of this facility in more than a year.

The Swiss National Bank announced the results of the overnight US dollar auction of September 22. The central bank allotted US$10 billion against the bid amount of US$16 billion. The central bank allotted 62.01% of allotment at a marginal interest rate of 2.25%.

Sweden’s target of a 1% surplus in public finances is expected to be surpassed in the coming few years, the Budget Statement released by the Government Offices of Sweden showed. The nation has a strong public finance, which assist its work on enhancing policies for full employment.

The Danish government’s net financing requirement showed a negative balance of 27.5 billion krone in August as total receipts exceeded the expenditure, the central bank reported. The Danish central bank said it has decided to increase the issuance of treasury bills due to the turmoil in financial markets. Consequently, the Danmarks Nationalbank will hold an extraordinary T-bill auction on September 24. The maximum issuance at the auction will be DKK 25 billion in nominal value in the existing issue T-bill 2008 II.

The Statistics Estonia said the Producer Price Index or PPI rose 7.3% year-on-year in August, a smaller growth compared with July’s 7.8% rise. Meanwhile, the import price index increased 8.4% year-on-year in August versus the 8.8% rise recorded in July.

A report by the National Bank of Poland said that the net inflation, which is the core inflation after excluding food and non alcoholic beverage, and fuel prices, rose annually at a faster than expected rate of 4% in August compared with a 3.5% increase in July. Analysts expected a rise of 3.8%.

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