Psychology for major markets August 14th

EUR/USD – EUR/USD breaking above 1.10 as USD eases following the softer PPI data. Focus on US CPI with weaker data needed to halt USD losses.

USD/JPY – USD/JPY corrected higher helped by mildly dovish comments from BoJ deputy governor Uchida. But levels near 150 likely to be hard to break, and bigger picture risks on the downside, although JPY upside limited by better equity tone.

EUR/GBP – Pushing back up towards 0.86 after weaker than expected July UK CPI data, but weaker UK real sector data may be needed to extend upside progress.  

AUD/USD – AUD has extended gains above 0.66 as risk sentiment stabilises. Further upside scope exists if risk sentiment continues to improve.

Equities – Slumped after softer US employment data, helped by unwinding of JPY funded risk positions, but is recovering modestly. High US valuations limit the scope for recovery despite sharp yield declines.