Markets watch out for Putin’s Victory Day speech


The pound enters the week losing value against both the US dollar and the euro amidst an ongoing backdrop of deteriorating global investor sentiment. Investors continue to sell in the wake of the Bank of England’s cautious rate hike.

Although interest rates rose by 25 basis points, the overall economic outlook looks bleak. Sterling is likely to decline further as it is confronted by several issues which are weighing on the British currency. The cost of living has risen significantly which is set to slow down economic growth, and Governor Bailey also expects the UK economy to contract later this year.

Furthermore the global market backdrop is also impacting the pound. Stock markets are declining which conveys investor morale is low, and the war in Ukraine is advantaging the safe-haven US dollar.


The dollar therefore continues to strengthen and is up against major currencies. Surging inflation, the war in Ukraine, and tighter lockdowns against COVID-19 in Beijing and Shanghai, have left investors uncertain on many counts.

Speculations that Russian President Vladimir Putin might declare war on Ukraine in order to call up military reserves during his speech at “Victory Day” celebrations also hurt market sentiment. Putin has so far characterised Russia’s actions in Ukraine as a “special military operation”, not a war or an invasion.

The US Federal Reserve hiked its benchmark funds rate by 50 basis points last week and strong jobs data has reinforced bets on further big rate increases.

Key announcements

14:00 – GBP – MPC member Saunders speaks