Psychology for major markets December 12th

EUR/USD – Under pressure as the USD makes general gains with December Fed hike seen as uncertain. Dipping below 1.05 but scope for recovery if both Fed and ECB cut 25bps.

USD/JPY – Well bid on reports that BoJ officials are happy to delay the next rate cut, but yield spreads still suggest USD/JPY downside risks

EUR/GBP – EUR/GBP hit lowest since April 2022 as GBP holds up better than EUR to general USD strength. But downside limited if ECB only cut 25bps

AUD/USD – Managed a recovery from the year’s lows reached on Wednesday after a stronger than expected employment report. Further upside potential but yet to develop any real upside momentum.

Equities – S&P 500 remaining resilient despite a mild correction from the post-election rally. Tariff details and Fed stance will be key in the coming weeks after solid employment report.