Important events today:

12:00 UTC – EU: publication of the ECB’s key interest rate decision.

12:30 UTC – US: Retail Sales Change.

US inflation came out slightly worse than the median forecast, with the figure rising to 3.7%, preventing the Federal Reserve from moving to a cycle of interest rate cuts in the coming months. The Fed’s real interest rate now stands at 1.8%, versus -1.55% in the UK. There is now a strong consensus in the market that inflation in the US will remain in the range of 3-4% until the end of the year, so the Fed’s real interest rate will be at least 1.5%, while in the same UK the real interest rate will better become zero.

This situation is negative for the pound, however, I do not expect strong sell-offs of the British currency today, as the growth of oil prices will provide local support for the pound. Financial media is actively discussing the critical situation with oil reserves in the U.S., which fell to a 40-year low. The International Energy Agency urges the U.S. authorities to quickly replenish the strategic reserve to prevent an energy crisis in North America. Increased purchases of black gold into reserves will have a favorable impact on oil prices.

Recommendations: Sell 1.2505/1.2525 and TP 1.2430.