We’ve all been there, you search for an email or calendar invite in Outlook only to find that it isn’t there anymore. Until now deleted items were moved into the Deleted Items folder, then they would disappear after being in that folder for 30 days. With this update, the length of time items remain in the Deleted Items folder is extended to indefinitely or according to the duration set by your administrator. So that email or calendar invite you were looking for is still there if you search for it later—even if you accidentally deleted it.
If you are an Office 365 administrator, this means we’ll be updating the Default MRM Policy for everyone using Exchange Online over the next month. As an administrator, you also have control over this behavior. If you want to keep the 30-day policy or set a custom retention period, that can be done as well and you don’t even need to wait for the change. Also, if you have already created a custom MRM policy, (as long as it has a name other than “Default MRM Policy”), you don’t need to do anything and the change will not impact you.
Read more at source: http://blogs.office.com/2015/02/20/extended-email-retention-deleted-items-office-365/