Psychology for major markets June 12th

EUR/USD – Broke below 1.08 after the strong non-farm payroll and the announcement of a French election, but holding sub-1.08 may require a more hawkish than expected FOMC, which may require US CPI to deliver more strong data.

USD/JPY – Initial focus on the US CPI and FOMC but risk that Friday's BoJ meeting could squeeze JPY shorts if the BoJ do more than slightly reduce their JGB buying.

EUR/GBP – Pressing towards the 0.84 level on general EUR weakness despite softish labour market data. Next week’s CPI data and the subsequent MPC statement could determine the next move.

AUD/USD – Under pressure after strong US employment data but caution likely ahead of US CPI and FOMC and mild positive sentiment towards China supporting.

EUR/CHF – Heavy CHF short positions suggest downside risk especially with political uncertainty growing in Europe after EU elections, but CHF valuation looks high, particularly against the JPY.

Equities – Fragile but if CPI avoids an upside shock Powell is unlikely to sound hawkish enough to trigger a major sell-off.