Post FOMC trade.

The preferred outcome of CPI and FOMC aligning didn't happen, as soft CPI was met with a rather hawkish FOMC statement suggesting only one rate cut this year.

The FED reiterated a data dependent approach (as has been said all along) but ultimately it sounded rather more hawkish than perhaps the market was hoping for.

Ultimately, 12 months down the road, I suspect chair Jerome Powell will deserve a round of applause for threading the needle and engineering a soft landing.

Where does today's information leave us?

The good news is, I believe today's news still leaves short JPY trades on the table. As the yen is shortable in a higher for longer or soft landing scenario.

Should we trade USD JPY long? Possibly, but given today's soft US CPI, my preference is to trade the most hawkish central bank, which means NZD JPY long.

Email photo to follow: