Psychology for major markets Nov 14
Risk appetite slips as AI sensitive stocks correct lower
EUR/USD – EUR trading back up to the centre of the 1.14-1.18 range. The end of the US shutdown may be leading to some squaring of long USD positions, but little reason to expect a range break.
USD/JPY – USD/JPY backing off the 155 level but EUR/JPY continues to make new all time highs, despite weaker equities. Fading expectations of a December BoJ rate hike weighing on the JPY. Verbal intervention continues to slow but not stop losses.
EUR/GBP – EUR/GBP continuing to make new highs for the year, helped by weaker data, political uncertainty, concerns about the abandonment of plans to raise income tax, and rising expectations of BoE easing in December. But gains above 0.8850 look likely to be more difficult.
AUD/USD – AUD/USD showed a more positive tone helped by strong labour market data but slipping back as equity markets correct lower. Still stuck in a 0.64-0.67 range.
Equities – S&P 500 down from the highs as AI sensitive stocks correct lower. Nvidia results next week in focus but also some concerns that Fed easing may be less aggressive than expected.