Psychology for major markets Sep 11
Mostly rangebound waiting for CPI and then Fed next week.
EUR/USD – EUR/USD shying away from a test of the top of the range and now steady near 1.17 awaiting US price data and Fed next week.
USD/JPY – JPY recovered on reports of an increased chance of BoJ tightening this year, but gains have been modest. Still scope for substantial JPY gains as yield spreads tighten further.
EUR/GBP – Still stuck in a 0.86-0.87 range. This will likely be hard to break ahead of the November BoE rate decision unless we see global moves in risk sentiment, but risks on the upside.
AUD/USD – Breaking the top end of the 0.64-0.66 range, with the 0.6625 year’s high now a target.
Equities – S&P close to highs, but downside risks mounting as weaker data unlikely to benefit equities from here on.