Psychology for major markets January 6th

EUR/USD – Rallying a little helped by positive equity market performance. Still below the level suggested by yield spreads, so rally could extend

USD/JPY – Still well bid on the back of rising US yields and general USD positive sentiment, but upside limited as we approach intervention territory near 160.

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.