News background & trading ideas for 08/02/2019

The highlight event of yesterday became an announcement of the Bank of England meeting. The rate and other parameters of monetary policy were predictable upheld. The forecasts of the Central Bank about the UK economy shape were pressuring the pound, which has been dismal (particularly the Bank of England has curtailed the forecast for GDP growth for 2019 to 1.2% from 1.7%). Actually, we have warned that Brexit and its uncertainty will pressure on the BoE. Nevertheless, we continue to consider what is taking place as a part of a great game, where the Central Bank plays not the last role. The object of the game is soft Brexit. One of the conditions for its implementation is the creation of the illusion of complete losses in case of an exit without a deal. These kinds of predictions will make parliamentarians more compliant. Recall that May yesterday led negotiations in Brussels, which both parties recognized as "tough but constructive." So the caravan is going and we continue to recommend mid-term purchases of the pound.

Another impressive event of this week was the lesson taught investors around the world by SoftBank founder, a billionaire Masayoshi Son. Quite often our clients are interested in how to determine the fair value of the asset. So Masayoshi Son gave an answer to this question and also showed how to turn $5 billion into $17 billion overnight. Analyzing the financial statements of the company, he drew the following expression: "25-4 = 9?". It stands for as follows: at SoftBank's asset value of 25 trillion yen and a debt of 4 trillion yen, the company's capitalization is only 9 trillion yen. Thus, Masayoshi Son showed that SoftBank is undervalued by the market by almost 14 trillion yen. And since the company's shares are so cheap, he announced plans to repurchase its. As a result, SoftBank's capitalization increased by 18% within one trading session.

But back to the financial markets reality. The dollar continued to strengthen in the foreign exchange market. But we still recommend avoiding its purchases. The doomsday clock for Americans state employees is ticking. The new shutdown is around the corner (a week), while there is no progress yet.

Today, in general, does not augur any surprises, but “Brexits”, shutdowns, the USA&China negotiations (the news has passed that the meeting of the heads of China and the United States, scheduled for March 1, may not take place) can make an informational shot any moment, so you need to be focus anyway.

Besides, it’s worth taking attention on the Canadian dollar, on which the portion of significant statistics about labor market condition will be published. We tend to sales of USDCAD pair.

Also today we will be looking for points for gold purchases intraday and mid-term. As for oil, after the asset again passed below 53.50, we are hitting pause in asset purchases. Buying points of EURUSD pair look very attractive, as well as sales of USDJPY are quite good.

Gold is still in the area of optimal points for purchases. As long as the asset is above 1294, we see no threats for long positions. So buy from the current, add about 1295 and earn. Minimum profits are set around 1320, and stops are placed below 1290.
And once again we draw on excellent points for the Russian ruble sales.