Psychology for major markets February 14th

EUR/USD – EUR/USD broke above 1.04 on hopes of an end to the Ukraine war which also boosted European equities and yields, and has extended gains as the market has taken a positive view of the US reciprocal tariff announcement. But a lot of optimism is getting priced in so upside progress may prove more difficult from here.

USD/JPY – USD/JPY reversing lower after correction as US yields drop back and the USD sees general losses as the market takes an optimistic view on tariffs. But cross flows JPY negative as long as equity markets stay strong.

EUR/GBP – EUR/GBP bounced from 0.83 into and following the BoE MPC meeting, but has fallen back since as markets maintain their view of only modest policy easing this year. The 0.83-0.84 range looks hard to break.

AUD/USD – Breaking higher as optimism that tariffs won’t be too negative for global growth boost Asian equities. Still looking attractive on a yield spread basis as long as risk sentiment is positive

Equities – Proving very resilient as both higher yields and tariff concerns have been shaken off. But high US valuations continue to be a barrier to further gains