Major events of the week ended February 13

Source: Dukascopy Bank SA
Euro zone
The closely watched event of the previous was the negotiation between the Eurogroup and Greece's officials, as European leaders have been trying to avert the worst-case scenario of Greece defaulting on its debt. Unfortunately, the agreement was not reached after seven hours talks in Brussels, but both parties hinted that there was still hope for a deal, with negotiation resuming this week. Before the talks Greek Finance Minister Yanis Varoufakis outlined that the debt-stricken Greece was unable to meet its financial obligations and that there should be a "haircut" at some stage.
An unexpected move came from the other side of Europe, where the Swedish Riksbank cut interest rate and deployed quantitative easing to combat deflation. The central bank cut its main repo rate by 10 basis points to –0.1%. On top of that, the bank announced it will buy SEK10 billion ($1.2 billion) worth of government bonds, to further ease monetary policy. The Riksbank also hinted that it stands ready to make monetary policy even more accommodative, in case economic conditions deteriorate further.
UK
The Bank of England revised its short term inflation forecast, saying that there is a high probability that consumer prices will slid to the negative territory shortly but highlighted that there is no risk of persistent deflation in the country. BoE Governor Mark Carney said that inflation is seen falling below zero in the coming months on the back of weak oil prices, and the central bank stands ready to deploy more measures to combat prolonged low inflation. Inflation is expected to reach the BoE's targeted rate of 2% by 2017, sooner than it had predicted three months ago. The BoE sees the CPI inflation at 0% in the three months through June of 2015, hinting it may turn negative in spring. Inflation should then rebound at the turn of the year as cheap oil data drops out of annual comparisons. Currently investors expect the BoE to begin slowly tightening policy in mid-2016.
US
June 2015 is considered as an appropriate timing for the first interest rate hike in the US, according to Federal Reserve Bank of Richmond President Jeffrey Lacker's opinion.  Still, the normalisation of the Fed monetary policy continues to depend on economic data, but it should be unexpectedly soft in order for Lacker to change his view. In a press conference following the December FOMC meeting, Fed Chair Janet Yellen said the committee was unlikely to alter rates in its subsequent two meetings. That suggest dropping the phrase at the March 17-18 FOMC gathering should the Fed considers raising rates in June.
Australia
Reserve Bank of Australia Governor Glenn Stevens warned that interest rate cuts may not be as effective as they used to be in the past. Thus, the Governor is hinting that the RBA will not follow other major central banks that slashed rates to zero and printed cash to kick-start their economies. However, Stevens underlined that he did not believe that monetary policy had reached the point where it was unable at all to provide additional boost to the economy. The central bank cut the cash rate for the first time in 18 months last week to a historic low of 2.25%.

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