Psychology for major markets Feb 1

EUR/USD – EUR stabilising near 1.08 after the FOMC, which was seen as marginally hawkish with Powell calling a March rate cut unlikely. Mildly USD positive tone, but not major trend.

USD/JPY – USD/JPY looking stretched as 10 year yield spreads still suggest downside risks. Renewed US banking concerns also JPY supportive.

EUR/GBP – Underlying sentiment GBP positive as UK inflation is perceived to be more persistent than elsewhere, and UK PMIs continue to outperform, but BoE in focus with dovish risks.

AUD/USD – Solid global equity performance helping the AUD to recover after recent weakness due to China concerns, despite softer CPI data.

USD/CHF – CHF benefiting from Middle East unrest, but a retest of the lows below 0.93 would likely require something that significantly undermined confidence and growth expectations.

Equities – US market remaining close to all time highs but undermined by banking concerns and slightly less dovish Fed