Psychology for major markets August 7th

EUR/USD – EUR/USD holding close to 1.09. Underlying tone remains quite neutral.

USD/JPY – USD/JPY correcting higher helped by comments from BoJ deputy governor Uchida. But underlying picture remains weak

EUR/GBP – Testing 0.86 as GBP suffers from weaker risk sentiment and position unwinding, but further weakness in risk sentiment needed to extend gains.

AUD/USD – AUD found some support below 0.64 and has extended gains to the high 0.65s as risk sentiment stabilises. Further upside scope exists if risk sentiment continues to improve.

Equities – Slumped after softer US employment data, helped by unwinding of JPY funded risk positions, but is recovering modestly. High US valuations limit the scope for recovery despite sharp yield declines.