Psychology for major markets May 30th

EUR/USD – Firmer USD tone on the back of rising yields and softer equities, but good support near 1.08 and some decline in EUR yields needed if we are to see any extension of the decline.

USD/JPY – Downside risks persist on declining yield spread and threat of BoJ intervention near 157, but small gains possible in low vol environment as carry trading continues.

EUR/GBP - EUR/GBP dropped below 0.85 on increased ECB talk after dovish ECB comments on Monday, but has recovered back above the figure and break lower looks tough now June UK rate cut has been priced out.

AUD/USD – Pushed higher on better commodity/China sentiment. US yield declines likely to be required for a break above 0.67.

EUR/CHF – Shying away from a test of parity and dipping lower on strong Swiss GDP data, but still has upside potential if confidence in European recovery builds.

Equities – Falling back as yields rise in the US and Europe but dovish ECB comments and better European growth data suggests limited downside