Bank of England Raises Rates, ECB Abstains, Waiting for NFP

The news attention of the markets yesterday was riveted not to the US, but to Europe. The Bank of England and the ECB announced their decisions on the parameters of monetary policy. As expected, the Bank of England raised the rate by 0.25%, bringing it to 0.5%. Recall that at the previous meeting the rate was also increased, but by 0.15%. That is, we have two rate increases in a row - for the first time since 2004 (!).

The underlying motivation for these actions is obvious – inflation. The Bank of England raised its own inflation forecast to 7.25% from 6%, which was predicted in December.

The ECB decided not to touch the rate. However, it is also predictable. The current concept of the ECB: the economy is primary and the main thing is not to harm it. Accordingly, raising the rate is not their option.

Considering such scenarios, let's once again pay attention to the sales of the EURGBP pair against the backdrop of an increase in the interest rate differential in favor of the pound.

Mark Zuckerberg lost $29 billion yesterday after shares of Meta Platforms Inc posted a record one-day drop of 26%. Whereas Jeff Bezos added $20 billion to his net worth following Amazon's great quarterly results and the company's stock up 15% in post-closing trading.

The main event of today is the publication of statistics on the US labor market. Considering how bad ADP's numbers have been, there's plenty of room for intrigue. And if so, then you can try news trading, since a surge in volatility seems inevitable, or at least very likely.

The optimal choice of instrument for trading is a pair of USDCAD - simply because at the same time with the figures from the US, data on the Canadian labor market will be published, which is of increased importance for the Canadian dollar.

Recall the sequence of actions. A minute before the release of the data, we place pending orders of the stop type for buying and selling in 20 points from the price that is in the pair at that time. And then we wait. If there is weak data from the US and strong data from Canada, a sell stop is picked up, and if it is weak from Canada and strong from the US, then buy stop. Well, then it remains to be patient at least for a couple of hours, after which we fix the profit.