-Christian Schulz, senior economist at Berenberg Bank
A flurry positive data came out on Tuesday from the Euro zone countries. In Germany, retail sales surged at the fastest pace in seven years in January, adding to hopes that private consumption will support growth of the region's powerhouse. Retail sales soared 2.9% in real terms month-over-month in the beginning of 2015, overshooting even the highest estimate for a 1.1% gain. Measured on an annual basis, the indicator advanced by 5.3% in real terms, the biggest increase since June 2010. The main catalysts appeared to be cheap oil, sturdy income gains, as well as low interest rates. These aspects also contributed to brighter German consumer mood, which rose to its highest level in more than 13 years.
In the meantime, Spain saw its unemployment rate falling in February, as fewer Spaniards lost their jobs. The number of unemployed in the Euro zone's fourth largest economy declined by 13,500 in the reported month, whereas the jobless rate still remained at an unhealthy level of 23,70% in the December quarter. However, producer prices in the Euro zone appeared to as a fly in the ointment. Industrial producer prices, a proxy for the closely watched consumer prices, fell again in January, with the gauge booking the 18th consecutive month in contraction on an annual basis. The PPI retreated 3.4% on the year in January, following the 2.6% decline a month earlier.
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