Weekly review.

The week starting Monday 10 June had a lot of information to digest. Starting with political uncertainty weighing on the EUR. Essentially, growing support for the far right in France caused negative sentiment for the euro. I must confess to ignorance regarding the inner workings of french politics, but it appears the bottom line as far as 'the market' is concerned: Macron's centralist party offers stabilisation (the better the devil you know). And any suggestion of a far right (or far left) party in power causes uncertainty, which in turn causes negative sentiment. This could create EUR opportunities over the coming weeks, long or short, according to whichever party has the upper hand as the election approaches. Interesting to note the GBP also suffered a little this week, I suspect partly due to geographical proximity. Of course the UK has its own upcoming election. But a lack of significant disparity between the policies of the parties is perhaps why the GBP didn't see as much volitility upon the election announcement.

Next up we had the major US events of the week, CPI and the FOMC meeting. CPI encouragingly showed disinflation is on track. Whereas the FOMC was deemed a 'hawkish hold', with the dot plot suggesting only one cut by the end of the year. And the battle between 'higher for longer' and 'soft landing' will continue with each upcoming data release.

Finally, the week closed with an interest rate decision from Japan. No indication of an imminent rate hike from the BOJ was yen negative, but an announcement of a reduction in bond purchases was yen positive. Ultimately, I still expect JPY short 'interest rate differential' trades will be the main strategy over the coming weeks and months.

On a personal note, it was a week with two trades (interesting it was only two trades given all the information, but you can only place a trade when you find complete peace with your decision). A NZD CAD 'interest rate differential' trade hit profit. And a NZD JPY 'interest rate differential' trade hit the stop loss as there was no appetite for JPY shorts into the BOJ meeting.

In the week ahead, we have the RBA rate decision, US retail sales, UK CPI, NZD GDP. A rate decision from the UK and a rate decision from Switzerland, where I'm hoping a second rate cut from the SNB could reinvigorate CHF shorts.

Results for week:

Trade 1: NZD CAD +1.5

Trade 2: NZD JPY: -1

Total= +0.5%

Total since start of blog = +24.2% (risking 1% per trade).