Psychology for major markets 26 Jan
Improving European equities helping to reverse EUR's post-ECB weakness. More rangy picture likely into FOMC next week
EUR/USD – Stabilising after post-ECB losses. Solid European equity performance supportive. 1.08-1.09 likely to hold ahead of FOMC next week.
USD/JPY – JPY still struggling to benefit from yield spread moves in its favour, with weak CPI dampening expectations of BoJ tightening. But hard to justify gains above 148.
EUR/GBP – Underlying sentiment GBP positive as UK inflation is perceived to be more persistent than elsewhere, and UK PMIs continue to outperform.
AUD/USD – Better global equity performance helping the AUD to recover after recent weakness due to China concerns. Gains continue to depend on improving global and regional risk appetite.
USD/CHF – CHF looks toppish here as SNB turns more dovish and halts FX selling.
Equities – US market holding close to all time highs but may be vulnerable to any decline in easing expectations.