Psychology for major markets Sep 18
Riskier currencies strong as equities continue to rise
EUR/USD – EUR/USD recovering after post-FOMC dip back towards the highs of the year. Strong equity markets remain supportive.
USD/JPY – USD/JPY broke the low end of the range seen since July at 146 after the FOMC but has quickly rebounded and JPY remains weak on the crosses as equities continue to strengthen.
EUR/GBP – Still stuck in a 0.86-0.87 range, but testing the top end on EUR strength. Little chance of an easier BoE stance near term, so any break likely to be due to global factors.
AUD/USD – Slipped a little lower after weaker than expected employment data but remains well supported as long as the environment remains risk positive
Equities – S&P continues to hit new all time highs on the back of lower US yields, but downside scope for yields now very limited and valuation is very extended.