Psychology for major markets December 16th

EUR/USD – Holding close to 1.05 with the focus on the FOMC meeting on Wednesday and any guidance it provides on future policy.

USD/JPY – Well bid on reports that BoJ officials are happy to delay the next rate cut, but now scope for a JPY recovery if the BoJ makes even a small hike at the meeting on Friday.

EUR/GBP – EUR/GBP oscillating around 0.83 after weak October GDP data triggered a reversal of recent GBP strength. Risks slightly on GBP downside with BoE meeting this week priced for no change in policy and markets pricing only slow UK rate cuts.

AUD/USD – Still bouncing around close to the lows of the year although yield spreads and risk sentiment suggest scope for recovery.

Equities – S&P 500 remaining resilient despite a mild correction from the post-election rally. Tariff details and Fed stance will be key in the coming weeks after solid employment report.