You may have noticed that I have inconsistent currency positions. On one hand, I have a trade that should perform well if risk appetite and economic numbers improve: short USD/CAD. On the other, I have a trade that should do well if risk aversion rises again, economic numbers get worse or the Chinese tightening story comes to the fore again: short USD/JPY. The first has given a technical buy signal, the second is in a trend, so there is a technical argument for entering both trades.

I don’t think I need to have a single strong view, especially when it comes to entering trades. A similar approach worked well last week when I bought sugar (fundamentally strong) and sold cocoa (fundamentally weak). When the mood turned bearish on the day, I was stopped out of the sugar trade, but am still making money on the cocoa one.

Will the risk-on mood continue? SPX futures and commodities have dropped back. I am wondering whether to buy the SPX but am cautious because I already have exposure to “risk on”. On the other hand, I have even more exposure to “risk off” through my shorts on soft commodities and long on the long gilt. I am waiting to see what the employment numbers at 1315 have to say.