Teunis Brosens, Research Analyst at ING, notes that at last, a positive surprise from the Eurozone as the January retail sales increased by 0.4%MoM, taking year-on-year growth to 2.0% and leaving the 1.3%YoY consensus expectation in the dust. Key Quotes “One should never read too much in single month readings of indicators as volatile as retail sales, but after a depressing run of confidence drops and deflation surprises, this analyst is relieved to see that consumers did not hold back on spending in January. In fact, December was revised up as well, erasing the yearend slowdown suggested by previous data. Retail sales therefore confirm that consumption started the year on a healthy footing, continuing the decent growth pace seen in previous quarters. Consumer confidence however took a turn for the worse especially in February, so it remains to be seen whether consumers will be keeping this up. At its meeting next week, the ECB will therefore not take these positive retail sales figures for granted. In fact, we believe the ECB will not be deterred from announcing further monetary easing. Most likely the ECB will announce a cocktail of more negative deposit rates, a broader definition of assets to be purchased under its quantitative easing programme, and a small increase in the €60bn monthly purchasing rate.” For more information, read our latest forex news.