Psychology for major markets January 30th

EUR/USD – Dropping back below 1.04 as Q4 GDP disappoints, but downside likely to be modest as ECB stance unlikely to change and danger of USD decline on weaker US GDP.

USD/JPY – JPY firm as yield spreads continue to move in the JPY’s favour with US GDP now likely to be weaker than originally thought and Eurozone GDP also on the soft side.

EUR/GBP – GBP edging higher as EUR weakens but upside looks very limited with UK growth unlikely to significantly outperform, a danger of easier BoE policy than anticipated and GBP trading at expensive levels against the EUR

AUD/USD – Made new post-pandemic lows near 0.61 on general USD strength and risk aversion, but has bounced strongly and looks good long term value near current levels, but may be held back by risk aversion near term.

Equities – Dipping on tech sector concerns as AI profitability looks threatened by Chinese competition. High valuations mean there is scope for a large correction, with tariffs also potentially a concern.