Psychology for major markets January 3rd

EUR/USD – Holding close to 2 year lows blow 1.03 as markets maintain a USD positive view, but losses look excessive relative to yield spread moves.

USD/JPY – Still well bid on the back of rising US yields and general USD positive sentiment, but upside limited by some verbal intervention from Japanese officials

EUR/GBP – Holding near 0.83 but recent downward revisions to GDP data may put GBP more on the back foot.

AUD/USD – Holding near the lows as US yields hold firm and markets remain disappointed at the lack of China stimulus and worried about upcoming impact of tariffs.

Equities – S&P 500 holding fairly steady just below the highs despite having slipped a little on rising US yields. Some vulnerability to any further rise in yields a risk premia are now very low.