Psychology for major markets Nov 13
Mild risk positive tone returns on end to US government shutdown
EUR/USD – EUR trading back up to the centre of the 1.14-1.18 range. The end of the US shutdown may be leading to some squaring of long USD positions, but little reason to expect a range break.
USD/JPY – USD/JPY backing off the 155 level but EUR/JPY continues to make new all time highs. Fading expectations of a December BoJ rate hike weighing on the JPY. Verbal intervention continues to slow but not stop losses.
EUR/GBP – EUR/GBP continuing to make new highs for the year, helped by weaker data, political uncertainty and rising expectations of BoE easing in December. But this is now nearly priced in so gains above 0.8850 look likely to be more difficult.
AUD/USD – AUD/USD showing a more positive tone helped by strong labour market data and solid equity markets. Focus returning to the top end of the year’s range above 0.67.
Equities – S&P 500 fell back from all time highs helped by some weaker labour market surveys, but didn’t back off far and the end to the government shutdown has restored a mild positive tone.