Psychology for major markets Apr 15

EUR/USD – Stabilising in the mid-1.06s helped by recovering risk appetite, but sentiment still negative with market seeing widening yield differentials.

USD/JPY – Positive sentiment resumed after a break to new 34 year highs following the US CPI data and an absence of Japanese intervention. But still little support for gains in current yield spreads, and intervention still possible if JPY weakens on crosses.

EUR/GBP- Testing support at 0.8530 as risk sentiment recovers. This week’s UK labour market and CPI data will be the next focus with a break of 0.85 possible if data is strong.

AUD/USD – AUD suffered from higher US yields and weaker equities post-US CPI, but 0.6450-0.65 range remains strong support unless we see renewed equity weakness.

EUR/CHF – Retreating from the 0.9849 high as EUR shows general weakness and market looks for ECB easing, with safe haven status also CHF positive given Middle East tension,  but support below 0.97.

Equities – US underlying sentiment still positive despite some dips on rising yields, and weaker growth numbers look necessary to trigger a bigger correction.