Key highlights of the week ended July 10

Note: This section contains information in English only.
Source: Dukascopy Bank SA
Euro zone
Athens has submitted belt-tightening proposals to try to unlock a new bailout package from its European creditors just two hours before a midnight deadline. The government of Greek Prime Minister Alexis Tsipras asked for a three-year bailout loan of 53.5 billion euros, in a last-minute effort to keep the country within the Euro zone. In return, Greece offered a package of reforms and spending cuts, including pension savings and tax hikes, similar to those presented by creditors last month.

Australia
The RBA kept its official cash rate unchanged at 2.00%. While the rhetoric was largely unchanged, the RBA retained a soft easing bias. The central bank said the Australian economy continued to grow over the past year, albeit at a rate, which is below its long-term average. Overall, the economy is likely to perform with a degree of spare capacity for some time yet. In addition to that, given very slow growth in labour costs, inflation is seen to remain consistent with the target over the next one to two years, even with a lower exchange rate. The RBA reiterated its view that a further decline in the Australian dollar is seen as both "likely and necessary".  On May 5 the RBA slashed the cash rate to 2%, and the bank was waiting to see what impact, if any, looser policy settings would have on growth.

US
The minutes of the latest FOMC meeting showed Fed officials were worried about the possible effect of the Greek debt crisis on the US economy. They also voiced concerns about future growth in China, the world's second largest economy, and other emerging markets. The developments abroad could potentially derail the US economy in part by pushing the US Dollar higher and hurting US exports. Thus, central bankers agreed that there were still a number of uncertainties both at home and overseas to lift interest rates from all-time lows. While economists had predicted the US central bank to hike interest rates in September, the recent deadlock on Greek debt and the precipitous plunge in China's stock market have urged many experts to expect a delay until the end of the year. The International Monetary Fund reiterated its view that the Fed should be patient with interest rate hike, as the think-tank downgraded markedly the growth outlook for the world's number one economy. The IMF cut the estimate for 2015 growth to 2.5%, down from the 3.1% forecast in the April World Economic Outlook. It predicted GDP growth would pick up to 3% next year, followed by a 2.7% gain in 2017 and 2.5% growth in 2018.

UK
UK Chancellor George Osborne delivered the first budget by a majority Tory government since 1996 on Wednesday, introducing deep cuts to the UK's benefit system. The government plans to reduce public sector net borrowing to 69.5 billion pounds this year, slightly lower than the 75 billion pounds the OBR had expected. Corporation tax will be cut further, with the rate, levied on company profits, falling to 19% in 2019, and 18% in 2020. In addition to that, Osborne pledged to tackle tax evasion and ease the tax burden on workers. The new budget also included an updated growth outlook from the OBR, which projected annual expansion this year at 2.4%, 2.3% in 2016, and up to 2.4% in 2017.

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Actual Topics

Mon, 13 Jul 2015 05:51:03 GMT

Greece has three days to ensure its stay in Euro bloc and unlock 86bn euro bailout

European leaders have failed to break the deadlock in the Greek debt crisis, with the country's future in the Euro bloc remaining uncertain.

Fri, 10 Jul 2015 07:00:10 GMT

China's consumer inflation rises, while producer prices continue to fall

China's consumer inflation climbed slightly in June, whereas stubbornly weak producer prices dropped again, sparking concerns about a sluggish Chinese economy, which is also struggling due to a stock market rout.

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