Psychology for major markets Nov 12
Risk positive tone on hopes of an end to the US government shutdown
EUR/USD – Recovering modestly after a dip into the 1.14s with equity sentiment recovering helped by expectations of an end to the US government shutdown, but still essentially a rangebound tone.
USD/JPY – USD/JPY Breaking to new post-February highs with EUR/JPY at new all time highs on the back of firm equities. BoJ intervention looking increasingly necessary to halt the JPY decline.
EUR/GBP – EUR/GBP held below recent highs of the year at 0.8830 after weak labour market data, but risks look to be on the upside with market now pricing an 80% chance of a December BoE easing and some increased political uncertainty.
AUD/USD – AUD/USD slipped back on general USD strength post-FOMC and some softening in equity prices, and has moved to the bottom half of the 0.64-0.67 range that has held for most of the year, but still looks rangebound.
Equities – S&P 500 fell back from all time highs helped by some weaker labour market surveys, but is supported by the expectation of an end to the US government shutdown.