Psychology for major markets July 12th

EUR/USD – EUR/USD pushing for a break of 1.09 with the USD generally on the back foot after the weak US CPI data

USD/JPY – USD/JPY consolidating near 159 after the big 3 figure drop following US CPI. Risks look balanced short term although previous episodes have seen JPY weakness resume after a sharp correction.

EUR/GBP – Mild negative bias continues, with some optimism about prospects for improved UK growth helped by the latest GDP data, and some mildly hawkish BoE comments. Year’s lows blow 0.84 under threat.

AUD/USD – Tone remains mildly positive with RBA one of the more hawkish central banks, with scope for new highs for the year above 0.68 after US yield drop on weaker CPI.

EUR/CHF – Edging up from 0.97 but upside looks limited now with risk sentiment in the balance.

Equities – Valuations getting stretched in the US. Europe less expensive but still challenged by weak growth and some political concerns.