While US personal spending and income held up, PCE deflator (Yellen’s favourite indicator of inflation) was 1.7%, softer than the 1.8% expected. A dollar sell off ensued, which found us caught out of position. Earlier in the day we had a healthy profit of 6,000 USD which I thought would go much higher. With equities performing well, Japanese data being dissapointing and Oil holding steady, there was no reason for JPY strength. Unfortunately even before this data was released, there was a mass dumping of dollars. Even with thin liquidity, the level was such that it could only be at the institutional level as all the MAJOR currencies moved significantly against the USD. I speculated on Twitter at the time that it reminded me of the massive dump that occurred prior to the FOMC announcement. To be honest, this stinks of insider info to me as even if PCE is slightly soft, at 1.7% it is still miles ahead of target (The Fed expected it to be 1.4% in December 2016!) and it is not totally unbelievable to consider that this situation could have been engineered beforehand. After all, who decided to dump BILLIONS of dollars for no reason?
Anyway I decided not to try to fight the market and close at a loss of 7,700 for the day. My logic being that we are still 2 months ahead of schedule and with suspicions of inside trading, thin liquidity there was no point in taking any risks just for the sake of being stubborn. Even with this loss, we are still massively ahead of our targets and its just not worth risking all our victories thus far just for the sake of saying “not going to let this trade go”. So for the first time in 10 days, our equity decreases, which I am ok with it. We are still insanely in profit for the month and its the overall result that matters. We may have lost this battle, but we are still winning the war. May consider getting back in shortly, but my risk appetite is not too for the rest of the day.