Psychology for major markets February 17th

EUR/USD – EUR/USD broke above 1.04 on hopes of an end to the Ukraine war which has also boosted European equities and yields, and has extended gains as the market has taken a positive view of the US reciprocal tariff announcement. But a lot of optimism is getting priced in so upside progress may prove more difficult from here.

USD/JPY – USD/JPY pushing lower as US yields drop back and JGB yield hit 15 year highs on stronger than expected Japanese GDP.

EUR/GBP – EUR/GBP bounced from 0.83 into and following the BoE MPC meeting, but has fallen back since as markets maintain their view of only modest policy easing this year. The 0.83-0.84 range looks hard to break.

AUD/USD – Breaking higher as optimism that tariffs won’t be too negative for global growth boost Asian equities. Still looking attractive on a yield spread basis as long as risk sentiment is positive

Equities – Proving very resilient as both higher yields and tariff concerns have been shaken off, with hopes of Ukraine peace deal seen as positive. But high US valuations continue to be a barrier to further gains