Psychology for major markets Oct 28
USD generally steady, JPY recovers slightly, EUR/GBP makes new high for the year
EUR/USD – In the centre of the 1.1540-1.1780 range that has held this month and still broadly neutral awaiting this week’s central bank meetings.
USD/JPY – JPY firmer after some verbal intervention from cabinet secretary Kihara and some comments from US treasury secretary Bessent encouraging a tighter BoJ monetary policy, but remains at very weak levels awaiting central banks decisions this week.
EUR/GBP – EUR/GBP reached new highs for the year at 0.8765 without an obvious trigger, although weaker shop price data may have contributed to GBP weakness. Risks remain to the GBP downside on nerves ahead of the UK Budget on November 26.
AUD/USD – AUD stronger on expectations of a US/China trade deal which boosted CNY and regional equities. Still in the centre of the 0.6350-0.6700 range that has held since April, but focus back on the top end.
Equities – S&P 500 made new all time highs on hopes of a US/China trade deal this week. Valuations remain very high, and quarterly earnings from most major tech companies due this week could have an impact.