Psychology for major markets 11 Dec

Some scope for USD to extend gains, focus on central bank meetings.
EUR/USD – EUR/USD should have scope to extend below1.08, with yield spreads suggesting scope below 1.07. Focus now on central bank meetings in the coming week.
USD/JPY – USD/JPY tumbled lower on Ueda’s comments, but was already ripe for a decline after the yield spread moves seen in recent weeks. But the sharp dip below 142 may mark a completion of the short term correction, although there is still scope for longer term declines.
EUR/GBP – EUR/GBP broadly steady but risks may be shifting to the upside. The market pricing in significantly more ECB easing than BoE easing, which may see some correction on the central bank statements in the coming week.
AUD/USD – AUD fell back after less hawkish commentary following unchanged rate decision at the RBA meeting, with weak Chinese equity performance also a drag. Higher US yields after the US employment report suggest a downside bias.
Equities – Slightly stronger than expected payroll details leave cautious tone intact ahead of Tuesday's and Wednesday's meeting next week. We do not expect these key events to significantly undermine the market.