US CPI Inflation Due - We're Protecting Profits
This afternoon (1.30pm) we get the release of the December US CPI inflation print. Prior figure was 7.1%, with the survey at 6.5%.
We feel that inflation will come in at expectation of 6.5%. This drop from the previous reading makes sense, with lower used car prices and energy costs both helping to ease pressure on the 7.1% print from last month. However, we think that shelter prices will have jumped, mainly down to hotel and travel increases over the holiday period. This jump will likely reduce the odds of a large miss in the figure later today.
Given the uncertainty, we are taking profit early on our USD/JPY spot trade. This was entered at 132.00 on Monday, with us closing out at 130.89, with us netting a gain of 0.85% (on a normal 10x leverage position this would be +8.5%).
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