Psychology for major markets October 1st

EUR/USD – EUR slipping lower after less dovish Powell comments, breaking below 1.11, but spread moves have been modest and downside looks unlikely to be significant.

USD/JPY – Victory for Ishiba in the LDP election has reversed some of the recent JPY weakness as he is seen supporting the Ueda BoJ’s planned tightening cycle, but 140-145 looks like a near term range.

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 – Better risk sentiment, particularly in Chinese equities, supporting a move to new highs for the year, but better China sentiment may not last so upside scope may prove modest.

Equities – S&P 500  staying close to the highs but valuations looking stretched with yields also higher