Psychology for major markets December 11th

EUR/USD – Under pressure as the USD makes general gains with December Fed hike seen as uncertain. Dipping below 1.05 but scope for recovery if both Fed and ECB cut 25bps.

USD/JPY – Well bid on reports that BoJ officials are happy to delay the next rate cut, but yield spreads still suggest USD/JPY downside risks

EUR/GBP – EUR/GBP hit lowest since April 2022 as GBP holds up better than EUR to general USD strength. But downside limited if ECB only cut 25bps

AUD/USD – AUD/USD slumped to new lows for the year as the USD continued to make gains, but weakness looks out of line with yield spreads and positive global and regional risk sentiment.

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.