Psychology for major markets September 13th

EUR/USD – Risk on the upside short term as market is seeing increased risk of 50bp Fed ease and ECB statement not seen as suggesting an October rate cut. But gains may be reversed if Fed only cuts 25bps.

USD/JPY – USD/JPY making new lows for the year as Fed easing expectations rise. Still scope for further losses if market starts to price in BoJ tightening more in line with recent BoJ statements.

EUR/GBP – GBP edged lower after UK GDP data disappointed, but break above 0.8450 would likely require shift of sentiment towards expecting a BoE cut next week.

AUD/USD – Better risk appetite after equity rally and weaker USD triggers gains above 0.67, but hard to see an upside break without better China sentiment.

Equities – Better tone at the start of the week and increased expectations of Fed easing suggests downside risks are not substantial without much weaker data