Important events today:

13:45 UTC – US: composite PMI.

In the debt market there is a drop in US government bond yields, which is negative for the dollar. For example, 3-month notes are trading at 5.15%, 2-year papers at 4.13% and 10-year papers at 3.52%. It is these bonds which are the benchmark bonds. The former show a benchmark for the Fed rate at the next meeting, the latter a benchmark for the Fed rate over the medium term and the long-term bonds signal investors’ inflation expectations.

What do we have in the balance sheet? The market expects a 0.25% rate hike from the Fed at the May 3 meeting, followed by a 1% rate cut in the second half of the year. The first factor is neutral for the dollar as the market has already priced in this event and the second is negative. Against this background it is advisable to use the decrease in quotations to the nearest support levels to buy GBPUSD.

Recommendations: Buy 1.2396/1.2350 and TP 1.2487.