Weekly Review

The week starting Monday 12 May began with 'tentative positivity' with news of positive Tariff negotiations, particularly regarding China (tariffs are reduced for the time being). 'Risk assets' gapped higher. The positivity was given an extra boost on Tuesday with lower than expected US CPI data, showing the possibility of a 'soft landing' still remains.

But, although the underlying market sentiment remained positive (VIX below 20, S&P buoyed, earnings season once again passing by relatively positively), Tuesday's 'price action' was as good as it got as far as the currencies were concerned. As a bit of malaise set in. I couldn't see a particular catalyst for the CHF and JPY strength, there was talk of supply chain issues raising inflation fears, but that isn't a 'new tariff concern'. Ultimately, sometimes you have to accept that it's ok not not know why, some moves are random, possibly caused by profit taking or another force we are just not aware of.

All in all, I begin the new week maintaining my underlying 'risk on' bias. Although keenly watching for the effect of 'late Friday news', a downgrade of the US credit rating caused a late 'risk off move'.

Weekend news the UK could be about to renegotiate BREXIT terms could add to the already positive GBP sentiment.

On a personal note, it was nice to 'bounce back' after last week's poor showing. A straight forward 'risk on' trade following US CPI data, which hit profit. But then unwilling to place a risk off trade during the mid week malaise, I waited for signs of a reversal in the CHF, eventually placing a AUD CHF long early Friday, which Ultimately dropped higher and was closed for a very small profit.

Results:

Trade 1: AUD CHF +1.5

Trade 2: AUD CHF +0.3

Total = +1.8%

Total since start of blog = +39.5% (risking 1% per trade).