Psychology for major markets October 16th

EUR/USD – USD remains firm but with limited momentum despite firm CPI and more cautious Waller tone failed to make ground after stronger than expected CPI, though biased lower given below 1.09. Focus on ECB meeting.

USD/JPY – JPY under pressure with UST yields still firm but 150 tough to break with yield spreads still suggesting current levels are too high.

EUR/GBP – GBP softened after weak CPI suggesting more significant easing but EUR/GBP still struggling to advance above 0.84 even though November rate cut now close to fully priced in. 

AUD/USD – Off the highs as USD gained after the employment report with some scepticism about the impact of Chinese stimulus, but remains supported by better Chinese equity tone and relatively hawkish RBA.

Equities – S&P 500 may be toppy with US yields still firm despite solid growth data with valuations stretched.