Psychology for major markets Sep 10
Mostly rangebound, AUD still firm
EUR/USD – EUR/USD shying away from a test of the top of the range and now steady near 1.17 awaiting US price data.
USD/JPY – JPY recovered on reports of an increased chance of BoJ tightening this year, but gains have been modest. Still scope for substantial JPY gains as yield spreads tighten further.
EUR/GBP – Still stuck in a 0.86-0.87 range. This will likely be hard to break ahead of the November BoE rate decision unless we see global moves in risk sentiment, but risks on the upside.
AUD/USD – Breaking the top end of the 0.64-0.66 range, with the 0.6625 year’s high now a target.
Equities – S&P hit another new all time high after US employment data led to lower US yields, and is holding close to the highs, but downside risks mounting as weaker data unlikely to benefit equities from here on.