Psychology for major markets November 8th

EUR/USD – EUR/USD has reversed much of the post-election decline, but remains lower with the likely impact of Trump’s policies seen as negative for Europe and the EUR. But the reversal of the US yield decline means downside now looks unlikely to extend sub-1.07.

USD/JPY – USD/JPY has now essentially fully reversed the post-election rise, helped by US yields dropping back and JGB yields rising. 155 is looking like a bridge too far and medium term risks are on the downside.

EUR/GBP – GBP staying firm against the EUR helped by a more hawkish BoE tone which has pushed UK yields higher. Pressure on 0.83 once again but still hard to see significant moves below this level given lack of optimism on UK economy.

AUD/USD – AUD/USD bounced strongly after the post-election dip and is now above pre-election levels, but upside remains limited by concerns around China.

Equities – S&P 500 slipping back after initial post-election surge. While tax cuts are seen as positive, tariff increases are not and at current valuations upside looks very limited.