Psychology for major markets August 5th

EUR/USD – EUR/USD tone remains mildly positive after the softer US employment report but is comparatively stable compared to the rest of the FX market in the volatile risk environment.

USD/JPY – USD/JPY collapsing with risk sentiment, with yield spreads still pointing sub-140.

EUR/GBP – GBP back above 0.85 level after the BoE rate cut on Thursday with EUR gains amplified by the decline in general risk sentiment. Some further upside possible if risk appetite stays weak

AUD/USD – AUD found some support below 0.64 but continues to struggle in a risk negative environment. Even so, upside scope exists if risk stabilises.

Equities – Slumping after softer US employment data, with high US valuations limiting the scope for recovery despite sharp yield declines.