Psychology for major markets October 31st
EUR staying firm, JPY showing mild recovery but US events now taking centre stage
EUR/USD – EUR/USD gaining ground on stronger Eurozone Q3 GDP and September CPI data. Awaiting the US employment report and next week’s US election to determine the next significant trend.
USD/JPY – JPY recovering modestly helped by some mildly hawkish comments from Ueda following the BoJ meeting suggesting the BoJ tightening cycle remain on track. But volatility still likely to be driven by US events.
EUR/GBP – GBP not much changed after the UK budget, despite the rise in UK yields. Weak growth forecasts going forward limit the upside and GBP risks may now be to the downside near term.
AUD/USD – Struggling against firm USD despite solid domestic fundamentals and more hawkish RBA after strong employment data. But risks on upside provided China news doesn’t deteriorate.
Equities – S&P 500 may be toppy with US yields still firm despite solid growth data with valuations stretched and risks around the US election.