After many hours of waiting, we finally got to know Putin’s message. The market breathed a sigh of relief and returned to “serious” topics. Today the FED is to raise interest rates by 75 bp for the third time in a row. It will be the culmination of this week, but definitely not the end of emotions.

Little rain from a large cloud

When the news of the planned speech to the nation of the President of the Russian Federation came to the media yesterday, a certain wave of anxiety could be felt in the market. A wave of rationalizing comments surfaced fairly quickly, as to be expected. In the back of their heads, however, probably everyone had the conviction that Putin is in fact unpredictable and that we are dealing with a powerful risk factor. Especially when speech was delayed for unknown reasons. In the end, it wasn’t released until this morning (it was probably recorded earlier) and it’s hard to find a reason for it. The most likely scenario is that various versions of the message have been argued, and there are many indications that a milder one won. The most important news is the commencement of partial mobilization, starting today. 300,000 reservists are to be appointed in the boots. There were also flavors, such as assurances that Russia will not bow to the nuclear blackmail of the West. The leader tried to strike a momentous tone when he spoke of uniting in the face of an external threat, but overall the evaluation of the speech is rather poor. Putin can do better than that.

The Fed keeps it in check

Now that it is possible to return to “war as usual”, investors are focusing again on the evening decision of the Fed. Nobody doubts that Americans will increase the cost of money by 0.75 percentage points for the third time in a row. And although the president Biden until recently he argued that the latest inflation reading was not so tragic, but the perception of the market changed dramatically. It has become clear that the FOMC will fully focus on tackling price dynamics, leaving the recession problem deeply in the shadows. Especially since the remaining macroeconomic indicators suggest that the US economy is not that bad at all and as long as the labor market is still stable, there is nothing to worry about. There are even speculations about a possible even higher rate hike, which, however, seems extremely unlikely. However, the mere appearance of 100 basis points on the wallpaper can be used for a “relief rally” after the decision has been announced. The main currency pair is close to the local low again and will probably be looking for an excuse to move up a bit. The market has clearly established itself in the vicinity of parity and so far there is no courage to move in any direction.

Others are trying to keep up the pace

Americans’ determined fight against inflation influences the decisions of other central banks. First, because the FED has always been a trendsetter and too strong to play against it. And secondly, it can be seen that decision-makers previously lacked conviction that their decisions could effectively solve the problem of price dynamics. Yesterday, the Swedes decided about a larger than announced move, but we will not have a real festival of decisions until tomorrow. Importantly, three key players will present their moves. According to speculations, the British are to raise the cost of money by 50 bp, although there is a lot of room for a surprise upwards, which would probably be useful for the pound. The Swiss are to make a triple move, which in turn … will complicate the situation on the franc even more. This one is definitely too strong now, and we can expect a continuation of the appreciation of the Helvetic currency. Theoretically, no changes should be expected in Japan, but there is room for surprises here as well, especially after the recent inflation readings. As usual, the Turks will add some color to this sauce, and although the market expects the status quo to be maintained, you never know.

There are several more interesting readings in the macroeconomic calendar, but with such a multitude of central bank decisions, no one will bother with them.