Market instability. Fed, Russia – Ukraine, ECB


The market is going through an unstable period due to many political and economic events. And this week promises to be exciting for investors.To get more news about accentforex, you can visit wikifx.com official website.

1. Demand for safe haven assets is on the rise due to fears of a possible Russian invasion of Ukraine.
Russian forces have been concentrating around their neighbor since the end of last year in what Western countries see as preparations for an invasion that could happen at any moment. US satellite imagery company Maxar has reported numerous new deployments of Russian military units in forests, farms and industrial areas just 15 km (9 miles) from the border with Ukraine.
In a letter to U.N. human rights chief Michelle Bachelet, seen by Reuters, the United States raised concern that “further Russian invasion of Ukraine may create a human rights catastrophe”.
The EU and the US are ready to impose tough sanctions on the Russian Federation, in the event of an invasion of Ukraine.
“We are always ready for diplomacy,” White House Press Secretary Jen Psaki said. “We are also ready to impose swift and severe consequences, should Russia instead choose war.”

So far, the market has received a positive boost as US President Biden and Russian President Putin have tentatively agreed to participate in high-level talks, giving hope for de-escalation and mitigation.

2. The second factor is the Fed’s uncertainty about how aggressive its moves to raise interest rates in March will be. The Fed has signaled that it will hike interest rates at its upcoming meeting in March to bring down inflation.
St. Louis Fed President James Bullard has called for aggressive steps to curb inflation, while New York Fed chief John Williams said Friday he sees little need for the central bank to go big at the start of its rate-hike cycle.

3. In the Eurozone, PMI data were published today, which jumped higher than expected. As a consequence of the easing of pandemic restrictions, the service sector market received a sharp boost, which had a positive impact on the economy.
“The surge in the euro zone flash Composite PMI for February suggests activity is recovering well from the pandemic-related weakness over the winter,” said Andrew Kenningham at Capital Economics.
“Having regained its pre-pandemic level in Q4 2021, the euro zone economy is likely to expand at a reasonable pace in the first quarter of this year and should accelerate in the next two quarters as tourism, travel and hospitality get back to normal. ”
A Reuters poll last week suggested the Bank would raise its deposit rate in the second half of this year, and not wait until 2023 as previously expected.