Psychology for major markets October 2nd

EUR/USD – EUR slipping lower after less dovish Powell comments, with the USD also benefiting from safe haven flows as Middle East tension rises. But USD gains have been modest and further EUR/USD declines will likely require a bigger oil price move.

USD/JPY – USD/JPY edging higher as Ueda comments sound less hawkish, but range trading likely to persist until we see changes in monetary policy expectations.

EUR/GBP – GBP still showing underlying strength with BoE expected to ease less aggressively than others. 0.83 will nevertheless be hard to break.

AUD/USD – Coming off the highs as risk sentiment weakens on Middle East concerns, but likely to hold above early year highs unless China sentiment deteriorates again.

Equities – S&P 500 slipping back on Middle East related risk aversion and could see a bigger correction as valuations are stretched.