Psychology for major markets Feb 14

EUR/USD – EUR holding the 1.07-1.08 range but testing the lower en as the USD remains generally firm after the strong January CPI data

USD/JPY – USD/JPY extending gains above 150 helped by strong US CPI and resilient equity markets. Falling US equity risk premia continue to encourage JPY bears, but verbal intervention is becoming louder and the risk of some short term FX action from the MoF is increasing.

EUR/GBP – Underlying sentiment GBP positive as UK inflation is perceived to be more persistent than elsewhere, but slightly softer than expected January CPI keeping EUR/GBP above 0.85.

AUD/USD – AUD finding some support on the crosses from better equity performance while a more hawkish RBA has also helped halt losses.

USD/CHF – CHF falling back after weaker CPI helped by strong equity markets and the SNB no longer providing support.

Equities – US markets remaining close to all time highs but may be vulnerable to any further decline in easing expectations.