Psychology for major markets 8 Jan

EUR/USD – EUR/USD gaining support from upward revisions in services PMIs, but 1.10 is likely to be a bridge too far ahead of US CPI next week. 
USD/JPY – Rising US yields at the start of the year boosting USD/JPY, but gains starting to look a little excessive. Downside scope into US CPI.
GBP/USD – GBP outperforming as UK yields rise strongly at the beginning of the year, and PMIs outperform, but upside more limited near term as market already prices a relatively less dovish BoE, and EUR/GBP losses have outstripped yield spread moves.
AUD/USD – Backing away from the 2023 highs near 0.69 as the USD makes a general recovery, but still well supported as long as risk sentiment holds up. 
USD/CHF – CHF showing remarkable strength early in the year, in spite of the SNB’s more dovish tone and the end of their FX reserve selling. But gains look overdone.
Equities - Payrolls strong but not strong enough to cause alarm. We expect CPI to be acceptably subdued, but the market is vulnerable to an upside surprise.