The Stoxx Europe 600 index closed marginally lower at 337.06 in a choppy session, after jumping 2.1% on Tuesday.
More broadly, investors focused on fresh economic data. Eurostat, the statistical office of the European Union, said retail sales in January jumped a better-than-expected 1.6% in the currency union compared with December, fueled by a solid increase in the nonfood sector. A second estimate on GDP growth confirmed the euro-zone economy expanded by 0.3% in the fourth quarter.
Additionally, the purchasing managers index for the euro bloc showed its economy grew faster than estimated in February, sending the composite PMI to the highest level since June 2011.
The data should factor into the ECB’s discussions when it meets on Thursday. Some analysts say the central bank could ease policy given that inflation in the region has been steadily falling.
The main focus at tomorrow’s ECB Governing Council meeting will be on the staff’s updated economic forecasts, and in particular whether inflation is likely to remain below target in 2016, thus potentially creating room for further monetary policy action in the coming months.
The real question, he said, is whether the ECB will tolerate an “ongoing risk of deflation” in countries such as Greece, Spain and Portugal. He said it’s likely the ECB will continue to underline the fact it has easing options, but hold off using them unless the recovery takes a turn for the worse.