Psychology for major markets October 14th

EUR/USD – USD remains firm but failed to make ground after stronger than expected CPI, partly due to the rise in initial claims. Still biased towards a break below 109 rather than above 1.10. Focus on ECB meeting this week.

USD/JPY – JPY under pressure as US yields rise but 150 likely to be tough to break with yield spreads still suggesting current levels are too high.

EUR/GBP – GBP softer after Bailey comments suggesting more significant easing but EUR/GBP still struggling to make ground above 0.84. This week’s labour market and CPI data in focus.

AUD/USD – Off the highs as USD gained after the employment report with some scepticism about the impact of Chinese stimulus, but remains well supported helped by better Chinese equity tone and relatively hawkish RBA.

Equities – S&P 500 may be toppy as US yields rise despite solid growth data with valuations stretched