Central banks are likely to further cut their interest rates, says Dr Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital Investors Ltd. He said the past week saw a bit of volatility return to risk trades early in the week on worries that China\'s 7.5 per cent growth target for this year was too low, uncertainty about Greece\'s bond swap and news Brazilian GDP growth had slowed to 1.4 per cent last year. Markets steadied later in the week though, as the Greek bond swap got solid support ahead of the Greek Government confirming that it had met its target for acceptance and that after triggering collective action clauses the participation rate was nearly 96 per cent, he said. \"The swap will reduce the value of privately held Greek public debt from 206 billion euros to around 100 billion euros and substantially reduce its interest costs. \"Euro-zone finance ministers have now cleared a 35.5 billion euros first tranche of funds for Greece under is second bailout and this means that Greece can now make a bond payment on March 20,\" he told Bernama. He said Greece was still likely to face problems down the track, but for now a messy Greek default had been headed off yet again. The economist said concerns about China\'s 2012 growth target of \"just\" 7.5 per cent were way overblown. He said China\'s annual growth target should be seen as a minimum bound of what was considered acceptable. Its annual growth target has been exceeded every year for the last decade or so by at least one per cent per annum. \"A further sharp fall in China\'s inflation rate to 3.2 per cent leaves plenty of room for more policy easing in China to ensure the economy\'s ongoing slowdown does not turn into a hard landing, however a another cut in Chinese banks\' required reserve ratio is expected very soon.\" Oliver said global central banks were still in easy mode. The US Fed looks be toying with the idea of another round of quantitative easing (QE), with the aim of buying bonds to keep down borrowing costs but soaking up the liquidity to ensure no impact on inflation. The Brazilian central bank cut its cash rate by 0.75 per cent with further easing likely as growth has slowed sharply and its cash rate is still 9.75 per cent. The Reserve Bank of India cut the required cash reserve ratio for banks for the second time this year. Oliver said the US payroll employment rose by another 227,000 in February and the previous two months were revised up too. The US economic recovery is starting to look a lot more self-sustaining which is good news for the US and good news the global economic recovery. In Australia, he said the Reserve Bank left interest rates on hold, reiterating that with growth expected to be close to trend and inflation close to target, monetary policy remains appropriate for now. \"But the data flow in Australia over the last week suggests growth is well below trend. Even our trade surplus vanished in January (although this looks to be temporary). \"So our view remains that interest rates need to be cut and that some time in the next few months they will be,\" he said. Touching on the shares, Oliver said shares were still vulnerable to a further correction in the short-term given high levels of investor sentiment, strong gains year to date and the oil price surge. However, he said any pullback globally was likely to be mild and the broader trend was likely to remain up. \"Valuations are attractive, particularly against very low bond yields, the risk of a euro-zone meltdown continues to fade, momentum in global economic indicators is positive, global monetary conditions are getting easier and easier and there is lots of cash on the sidelines,\" Oliver said. But thanks to tougher monetary conditions in Australia and the strong $A, the Australian share market is likely to remain a laggard to relative to global share markets. In Europe, the focus is likely to be on the EU finance ministers meeting on Monday in terms of progress towards strengthening Europe\'s debt firewall. \"The IMF will also meet to consider its contribution to the second Greek bailout. \"In the US, the Fed is unlikely to unveil any changes to monetary policy following its meeting on Tuesday,\" he said adding that rather the post meeting statement will be gleaned for any clues regarding the prospects of QE3. Meanwhile expect February retail sales to increase by one per cent (Tuesday), industrial production to increase by 0.5 per cent (Friday), manufacturing conditions in the Philadelphia and New York regions to have remained solid (Thursday) and inflation to have been boosted by rising fuel prices (Friday). In Australia, expect recent news of rising unemployment, soft economic growth and rises in bank mortgage rates to have resulted in a fallback in consumer sentiment after several months of solid gains (Wednesday). Data for housing finance and starts will also be released. Oliver said US and European share markets rose modestly on Friday in response to the success of the Greek bond swap and strong US employment data, but with gains constrained as an industry group rilled that the bond swap would trigger payouts on about US$3 billion in default insurance. The Dow rose 0.1 per cent and the broader S&P 500 rose 0.4 per cent. Futures trading points to a modest 3 points or 0.1 per cent gain in the ASX 200 when the Australian market opens on Monday morning.