WHAT's NEXT FOR EUROPE AND RUSSIA

HEADLINES

Bank Of England Sees Strong Growth But Ready To Cut Rates If Needed

Sweden Adopts Negative Rates, Bond Purchases To Fight Deflation Threat

Ukraine Ceasefire Deal Agreed At Minsk Talks

IMF's Lagarde: Reached Deal For $17.5 Bln Funding To Ukraine

ECB's Praet Says ECB Won't Bend ELA Rules For Greece

EU, Greece Can't Reach Agreement, Move Talks To Monday

Japan's Amari: Making Progress In Beating Deflation Despite Oil Price Fall

Irish Reverse Holds Eurozone December Industry Output Flat

Greek Unemployment Rate Steady At 25.8% In November

Bombardier Posts Loss On $1.4 Bln Charge For Paused Learjet Program

Shire Sees Mid-Single Earnings Growth In 2015

Total Takes $6.5 Bln Charge As It Unveils Deep Loss

Renault Pledges 2015 Profit Gain As Product Offensive Bites

Credit Suisse Outlines Measures To Deal With Strong Franc

Ryanair Loses Appeal Against Order To Cut Aer Lingus Stake

COMMENTARY

PREVIEW: US Shoppers May Treat Dollar Bulls To Feast

Dollar bulls will get a top-notch dessert after Friday's main course and, with a bit of luck, it may be just sweet enough to test the late-January highs of the greenback.

Retail sales and the weekly tally of jobless claims are on tap on Thursday morning. Bets that the Federal Reserve will drop "patience" from its forward guidance next month are already on the rise, and strong prints on Thursday would certainly help the hawkish view.

The Department of Commerce in Washington will release the numbers at 8:30am local time. At the same time, the Department of Labor will release its weekly jobless claims report. (WBP Online – Continue Reading) [19]

Ukraine Ceasefire Deal Agreed At Minsk Talks

The leaders of Russia, Ukraine, France and Germany have reached a ceasefire deal after 17 hours of talks in Minsk, Belarus, on the Ukrainian conflict.

The ceasefire will come into force on Sunday as part of a deal that also involves the withdrawal of heavy weapons from the front line.

Russian president Vladimir Putin was the first to announce the deal, saying: “We have agreed on a ceasefire from midnight 15 February.”

Putin added: “There is also the political settlement. The first thing is constitutional reform that should take into consideration the legitimate rights of people who live in Donbass. There are also border issues. Finally there are a whole range of economic and humanitarian issues.” (Guardian – Continue Reading) [20]

UK Headed For Deflation Says Bank Of England

The Bank of England has said it could be forced to cut rates even further as Britain heads for its first period of deflation since 1989 due to a dramatic fall in oil prices.

It said it would be ready to lower rates further or add to its £375bn stockpile of asset purchases if inflation remained persistently below target, though Governor Mark Carney said his "central expectation" was that a rate rise would be the Bank's next move.

The Bank also said that if the fall in oil prices boosted growth more than expected, the Bank would increase rates "more quickly than embodied in current market yields". Markets believe rates will not rise to 1.5pc until 2020. (Telegraph – Continue Reading) [21]

Welcome Riksbank To NIRP, QE And Forward Guidance

The Riksbank has managed to surprise by embracing a raft of unconventional easing measures that have not been adopted by other central banks during the financial crisis.

No other central bank has taken the steps of adopting negative interest rates, QE and inflation based forward guidance and to do so in a single meeting, which  makes this easing that much more spectacular.

The Riksbank also does not end there and leaves the door open to do more by suggesting it is willing to buy loans to companies via banks and indicate a “readiness to do more at short notice”. (IFR – Continue Reading) [22]

More Disturbing Findings Emerge On US Productivity Path

San Francisco Fed researcher John Fernald is producing disturbing results in research on the path of U.S. productivity growth.

A productivity boom from 1995 to 2003 was a blip in a longer-run slowdown dating back to 1973, he finds. Since 2004 the U.S. has been on a path of modest productivity growth of 1.5% per year, far slower than the 3% average that characterized the 1995-2003 boom period and the 1948-1973 trend.

Perhaps most disturbingly, the slowdown is the result of diminished innovation in the economy, as opposed to diminished investment, he argues. During the late 1990s, firms in retailing, wholesaling, broadcasting, utilities and other industries used information technology aggressively to reorganize and produce more output with less input. By the mid-2000s, “the low-hanging fruit of IT-based innovation had been plucked.”

It is an extension of earlier work he wrote last year and before. (WSJ – Continue Reading) [23]