Psychology for major markets Feb 29

EUR/USD – EUR/USD holding the 1.08 -1.09 range. Hard to see a near term break, but near term focus on the US PCE price data for January.

USD/JPY – USD/JPY sentiment turning more negative after BoJ’s Takata statement suggesting tightening potential in the spring, but significant JPY upside still likely to require lower yields elsewhere

EUR/GBP – EUR/GBP still stuck close to 0.8550. Mild upside bias seen given greater risks of a downward repricing of UK rate outlook.

AUD/USD – AUD hovering around 0.65 with sentiment a little less positive since last week’s lower US jobless claims data, but 0.6450-0.6550 range likely to hold near term.

USD/CHF – CHF risks on the downside after weak CPI with risk sentiment positive and the SNB no longer selling FX reserves.

Equities – US markets remaining close to all time highs helped by strong corporate earnings, but may be vulnerable to any further decline in easing expectations. Focus on inflation data this week.