Trading Plan – Tuesday 2nd May 2023: JP Morgan to the rescue (again)

Mark NugentMay 2023, Trading Plan

Trading Plan – Tuesday 2nd May 2023: JP Morgan to the rescue (again)

Good afternoon.

Last week, US Q1 GDP missed expectations by a significant margin (1.1% vs an expected 2.0%). Equities rose and continued to do so into Friday as the Fed’s chosen measure of inflation, Core PCE, came in on target (0.3%).

The week ended with Bank of Japan’s new Governor Ueda surprising many by failing to allude to forthcoming interest rate hikes just as Tokyo Core CPI came in at 3.5% vs an expected 3.2%. In fact, he announced a review of past monetary policy decisions that could take up to 18 months (!) and said the bank will “patiently” keep policy accommodative. The JPY fell and continued to do so yesterday.

I placed one trade: EURJPY long. It immediately went against me, and I lost 1.27%.

Over the weekend, we saw J P Morgan snap up First Republic Bank, the second biggest bank failure in US history and the fourth small bank to fail recently. Stability has been restored! For a wee while.

This week has two highlights: the Fed on Wednesday and the European Central Bank on Thursday will both set interest rates. It will be very informative to see how each central bank handles the fight against inflation in the light of the mini-banking crisis and worsening economic data.

As always, I go through my trading themes for the week in the video.

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