Psychology for major markets April 9th

EUR/USD – Rising on general USD weakness as “reciprocal tariffs” take effect, but lower European equities and front end EUR yields suggests some downside risks for the EUR.

USD/JPY – Fell sharply on big decline in global equities, but stabilising in mid-140s. But rising risk premia suggests more JPY gains to come.

EUR/GBP – Holding recent gains reflecting GBP’s relatively riskier status

AUD/USD – Holding at post-pandemic lows near 0.60. Decline in the last year has to some extent front run the current equity weakness, but upside very limited unless sentiment turns.

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