Psychology for major markets Sep 9
JPY rallies on talk of BoJ tightening, USD soft
EUR/USD – EUR/USD breaking to the top side of the 1.16-1.17 range, and now threatening the year’s highs at 1.1830. Upside still favoured.
USD/JPY – JPY recovered on reports of an increased chance of BoJ tightening this year. Scope for substantial JPY gains as yield spreads tighten further.
EUR/GBP – Concerns about UK public finances continue to undermine GBP confidence, but 0.87 remains hard to break.
AUD/USD – Breaking the top end of the 0.64-0.66 range, with the 0.6625 year’s high now a target.
Equities – S&P hit another new all time high after US employment data led to lower US yields, and is holding close to the highs, but downside risks mounting as weaker data unlikely to benefit equities from here on.