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Market Levitation Interrupted As USDJPY Tumbles
Greece may be on the verge of a Grexit, crude may be taking out all key technical support levels, and US stocks will still close higher. But let the USDJPY slide and watch as the levitation ends with a bang. And tumble overnight is precisely what the USDJPY did, pushing not only the Nikkei lower by 1.6% but also leading to what is shaping up to be an unrecord, also known as red, open in the S&P - this surely calls for a "Markets in Turmoil" flashing siren on the 9th floor of the New York Fed.
Why? it is unclear what caused the drop: was it just a delayed reaction to yesterday's market unmoving events out of Greece and commodity land, but several billion in option expirations pinned around 120 certainly helped. Just add an extremely illiquid market and watch how a determined seller can move the pair by over 100 pips in a few hours.
As a result European shares remain lower with the oil & gas and telcos sectors underperforming and travel & leisure, retail outperforming. Crude oil falls to 5-year low, ruble swings between gains and losses. Greek 10 year bond yield rises for second day. Italy sells 10-year debt at below 2% yield for first time on record. The French and Spanish markets are the worst-performing larger bourses, the Swiss the best. The euro is little changed against the dollar. Italian 10yr bond yields fall; Spanish yields decline. Commodities decline, with natural gas, Brent crude underperforming and zinc outperforming. U.S.
Market Wrap
- S&P 500 futures down 0.3% to 2080.6
- Stoxx 600 down 0.5% to 342.5
- US 10Yr yield down 1bps to 2.19%
- German 10Yr yield up 0bps to 0.55%
- MSCI Asia Pacific down 0.5% to 137.7
- Gold spot up 0.3% to $1187.3/oz
FX/BONDS
- Euro up 0.06% to $1.2159
- Dollar Index down 0.17% to 90.04
- Italian 10Yr yield down 9bps to 1.89%
- Spanish 10Yr yield down 8bps to 1.6%
- French 10Yr yield down 0bps to 0.83%
COMMODITIES
- S&P GSCI Index down 0.5% to 422.1
- Brent Futures down 0.8% to $57.4/bbl, WTI Futures down 0.7% to $53.2/bbl
- LME 3m Copper up 0.3% to $6310/MT
- LME 3m Nickel down 0.6% to $14955/MT
- Wheat futures down 0.6% to 611.5 USd/bu
Europe
- 2 out of 19 Stoxx 600 sectors rise; travel & leisure, retail outperform, oil & gas, telcos underperform
- 23.5% of Stoxx 600 members gain, 74.3% decline
- Eurostoxx 50 -0.9%, FTSE 100 -0.8%, CAC 40 -0.9%, DAX -0.7%, IBEX -0.9%, FTSEMIB -0.4%, SMI -0.1%
ASIA
- Asian stocks fall with the Sensex outperforming and the Nikkei underperforming.
- MSCI Asia Pacific down 0.5% to 137.7
- Nikkei 225 down 1.6%, Hang Seng down 1.1%, Kospi down 0.6%, Shanghai Composite down 0.1%, ASX down 1%, Sensex up 0%
- All 10 sectors fall with staples, tech outperforming and energy, telcos underperforming
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100 pip down-leg isn't the end of the world, let the junior traders have their fun.
It's like the jockey's race at the fairdowns......you can study that racing form all you want......you're not going to win.
Bigger USDJPY chart:
http://www.marketwatch.com/investing/Currency/USDJPY/charts
This is like watching a train wreck in micro-second frames for an hour prior to the collision. Lots of variation along the way that makes the whole thing distractive and boring until the pieces start to break off. As long as the algos are in charge the train has not started flying apart. Back to reinforcing our new root cellar...........
It's all Bullshit!!! A few key words out of "Old Yellen's" mouth and we're off to the races.
Look for 120.00 by 10am (NY).
Welcome.......to shock and awe.
https://www.youtube.com/watch?v=vIMwMsY0ndo
Italian, Spanish and Portuguese Bonds hit new ATL's this morning, quite strange as Greek 10Y blows out to 9.5%, who is buying this shite?
Tyler the pair is down 1% not much of a correlation YET
How any investor with half a brain could be buying the paper of any government these days is beyond me.
What year is this? I'm confused. Everything seems so much like it always has. I feel like dancing.
That's why we now have mandatory 29.5 hr/wk jobs.......more time for dancing.
Get the PPT off the porch of the nursing home, hit em with a shot of adrenaline and off we go. No problm before 2014 ends.
"Asia is probably NOT the next battlefield", says global capital flight as it moves to China and Japan today.
"Why? it is unclear what caused the drop: was it just a delayed reaction to yesterday's market unmoving events out of Greece and commodity land, but several billion in option expirations pinned around 120 certainly helped. Just add an extremely illiquid market and watch how a determined seller can move the pair by over 100 pips in a few hours."
i think if you look at the chart, it is a crucial 50 bps over the 120 handle in a few minutes between 2.30 and 3.00 pm.
price rig much?
It's hilarious that small jumps up or down in anything are always "tumbles" or "parabolic" here.
How the hell are thigns supposed to change at all? In a straight line.....?
Any temporary market collapse is just the first leg of a 'V' that then turns into a check mark as it makes new high's.
Old Yellen has done had her turn after Bullturd so now it's Drughi's turn I think. Just remember that it's Q and then E. If you get 'em mixed up people will think you are tweaking your speakers.
JPY does look like it's doing a W reversal pretty well now on the daily.
http://www.zerohedge.com/news/2014-05-02/marc-faber-warns-social-media-s...
Only 2 days left!
French 10Yr yield down 0 bps to 0.83%...
and yet some people actually believe that malarky about rates in the usa going up. :rire mon cul:
Anyone else remember when a weak dollar actually made the "market" go up?
fun...der...ment..als..
The dollar will take a breather here shortly giving other currencies a chance to get their balance. But it won't last long. A couple of months from now the dollar rocket will takeoff again...
http://www.globaldeflationnews.com/u-s-dollar-indexelliott-wave-update-f...
because Japan is fixed.