Psychology for major markets May 2nd

EUR/USD – Remains well supported on expectations of damage to the US from tariffs, but positive equity tone on latest Tech earnings supportive for the USD near term.

USD/JPY – Tested September 2024 lows below 140 but has bounced as equities have recovered. Upside nevertheless looks very limited above 145.

EUR/GBP – GBP has recovered some of the ground lost to the EUR on tariff concerns, but remains vulnerable to any turn lower in risk sentiment.

AUD/USD – Broke above key 0.64 level but has so far failed to build on gains. Clear break could open the way for progress into the high 0.60s.

Equities – Some stabilisation after initial bloodbath on US tariff increases but high US valuations still suggest scope for further declines longer term if tariffs cause significant US growth slowdown.