Psychology for major markets Mar 14
USD slightly soft as risk sentemnt remains strong
EUR/USD – EUR/USD holding above 1.09, continuing to benefit from firm equity markets. Risks towards 1.10 if risk sentiment holds up although a more hawkish tone from the Fed next week may cap.
USD/JPY – USD/JPY has weakened as evidence of stronger Japanese wage settlements mounts and markets start to speculate on the possibility of an early BoJ tightening. Risks still downside but good support on the 146 handle.
EUR/GBP- EUR/GBP supported near 0.85, with softer UK labour market data supporting an upside bias, but more dovish tone from the BoE needed to generate upside progress.
AUD/USD – AUD holding near 0.66 supported by generally softer USD tone and resilient equity markets. Potential for renewed gains if China sentiment shows some improvement
EUR/CHF – CHF risks still on the downside as SNB remain one of the more dovish central banks, valuation is very elevated and risks sentiment is positive.
Equities – US markets remaining close to all time highs helped by strong corporate earnings, but vulnerable to a decline in easing expectations after next week’s FOMC.