Psychology for major markets Apr 11

EUR/USD – Testing the bottom of the range ahead of the ECB meeting as yield spreads move in favour of the USD after the higher than expected CPI data. Scope for a break lower if ECB indicates a June rate cut is likely.

USD/JPY – Positive sentiment resumes after a break to new 34 year highs following the US CPI data and an absence of Japanese intervention. But still little support for gains in current yield spreads, and intervention still possible if JPY weakens on crosses.

EUR/GBP- The 0.8550-0.86 range holding for now, but risks on the downside as BoE seen more likely to follow a similar more hawkish rate path to the Fed.

AUD/USD – AUD suffering from higher US yields and weaker equities post-US CPI, but 0.6450-0.65 range remains strong support unless equity weakness extends.

EUR/CHF – CHF still soft, but holding below the 0.9849 high for now. Softer equity tone on the back of expectations of a less dovish Fed suggests topside now more limited.

Equities – US underlying sentiment still positive despite some dips on rising yields, and weaker growth numbers look necessary to trigger a bigger correction.