Psychology for major markets July 4th
EUR firmer after more dovish Powell comments and weak US data. JPY sentiment still negative in the absence of intervention.
EUR/USD – EUR/USD slightly on the front foot after the more dovish Powell comments on Tuesday and Wednesday’s softer US data. Testing 1.08 as US yields dip despite soft German orders data.
USD/JPY – USD/JPY dipping a little on general USD weakness after soft Wednesday US data, but no real JPY recovery on the crosses. Weak US employment report needed to maintain a firmer JPY tone. Underlying sentiment still JPY negative in the absence of intervention.
EUR/GBP – Stable in the 0.8450-0.85 range ahead of the UK election. Little election impact seen, with Labour landslide victory expected.
AUD/USD – Tone remains mildly positive with RBA one of the more hawkish central banks, but easier Fed expectations still look necessary to break above the year’s highs above 0.68.
EUR/CHF – Retaining its more positive tone of the last week after a positive reaction to the French election result, but 0.97 likely to be the middle of a new range so limited scope for further gains from here.
Equities – Valuations getting stretched in the US. Europe better supported after first round of French election but risks remain given weak German data and French political uncertainty.