Stocks Open Down As EURJPY Hits Fresh 11-Year Low

Tyler Durden's picture

Following EURUSD's modestly weak opening (though managing to hold above Friday's lows and inching higher), EURJPY has pushed to fresh new 11-year lows (and JGB yields at one-year lows). Asian equities are trading notably lower with Japan's Nikkei down 1.6% in early going (coming back a little now) and South Korea's Kospi down 1.1% so far. ES (the e-mini S&P 500 futures contract) opened lower, tried to get back up to Friday's close, failed and is now down around 6pts (at 1285) - still shy of where broad risk assets (CONTEXT) would expect - around 1280 for now - though AUD weakness (housing data bad not totally dire though carry being lifted), JPY strength (government comments on the flatness expected in Japan's recovery and safety flow) and Treasuries not open is undermining support for stock futures so far. The economically-sensitive commodities are leaking lower with Silver having given back its earlier gains and Copper down 0.75%, Oil is holding near $99 and Gold is down a smidge (and more stable than the rest) at -0.23% ($1635).

JPY is outperforming and AUD underperforming as EUR stabilizes modestly. The rotation from JPY to EUR as carry-currency of choice continues we suspect and the macro news is not helping tonight either as safety flows seek JPY/JGBs as opposed to USD/Treasuries (closed).

Credit markets are only open in Asia and JGBs are rallying - back to one-year lows (as corporate credit indices leak wider ITRX AUS +5bps, ITRX Japan +4bps, ITRX Asia  +7bps). US equity futures are losing ground from the after-hours ramp on Friday and CONTEXT (our broad risk asset proxy) is pulling lower (though stabilizing) as carry FX is down (though EURJPY vs AUDJPY is more balanced) and commodities are weighing modestly. With Treasuries not open, we will likely see correlation drop a little as the credit stabilizer is not there, though post Europe's close on Friday, ES and CONTEXT have been increasingly correlated.

Charts: Bloomberg and Capital Context

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mr Lennon Hendrix's picture

Don't worry, it's all priced in!  Buy while you can!  Buy anything and everything!  USTs are safe because Europe is imploding (which is priced in) but equity is going to ramp higher because the US is decoupling!  Where else would you invest?  Not Asia, they suck, not Europe, they suck, so buy US!

Buy US anything!  Munis have done great, why not buy some?  USTs have dome great, and will continue.  After all, what debt would you buy?  European?

And gold is in a bubble so don't buy that, it will go down now that people are pouring money into the US.  The dollar will stay strong throughout too, because the euro is screwed!  It is a full red and blue recovery!

USA!  USA!!  USA!!!

Mr Lennon Hendrix's picture

C'man!!!  USA!  USA!!  USA!!!

Oh regional Indian's picture

Seriously, having a puppet like Japan is such a powerful lever for the London/NY fixers.

One of the things hardly mentioned here anymore is the carry trade. If you look at FX supports and resistance, you can tell that those are the limits above or below massive un-winds happen. Indo/Japanese trade is one such im-balanced monster. And it's tiny compared to Japan's  other trading blocks.

Unwinding, like a coil spring snapping. Ouch!



Hephasteus's picture

Their puppets are whispering about massive outbreak of leukemia. One of the leaked radioactive elements strontium 91 deposits in bones and teeth and your bone marrow is where you do your heme cycle. So you get leukemia. They will need massive and I mean massive blood donations to stave it off for even a few years. But the dying is starting and will accelerate.

Oh regional Indian's picture

When self-mutilation becomes the lastest fad in a nation, and we know where the Otaku Japanese take their fads, it's a bad sign. WOuldn't you say Heph? A sign of a people in decline.

America's controllers have a lot to answer for.


Michael's picture

Does anyone know when Greek debt is going to be discharged and how much?

Hephasteus's picture

Yes that's chiron in aries. Self loathing.

I've said it before and I'll say it again. You're body has nothing to do with you and you're life really doesn't mean anything nor tell you anything meaningful about your unconformed self.

I got sidetracked into a youtube video about marriage in the Skyrim game. I like to study gamer population to see what it is that forces are doing with it. Anyway I made a very snide comment about how youtube has made it a pit video like most of the microsoft flight simulator crashes and weirdly connected tag stuff. The guy in the video was talking about his emotional reactions to scripted botted charcters in the game and why or why not he would want to "marry" them. Anyway he was drawing a huge amount criticism (virgo perfecting forces). With people telling him just how wierd and creepy he was making them feel. I suggested that he might be having a psychotic break. My comment got 50 plus thumbs up in a few hours and it is now completely santized the guy has hundreds of videos about the game and he's obviously protected by the studio and google as it's taggings have been completley altered with probably hidden find and replace linkages.

The funny thing is the rule makers can never pass up the eldritch device thing we call the internet. Their greed and belief in easy access to easly manipulated people all over the world makes them build it and rely on it as their main storage device for information every time. It's impermanence and ability to be erased and edited blocked and filtered is very attractive to those who want to manipulate it. But it's those same features that backfire in response to peoples ability to not only remember what they focus on but remember everything that happens even if it's work to dig it out. I find it quite amusing that bill gates has so many original documents and original pictures squirreled away in Iron Mountain Pennsylvannia thinking he's going to be able to own those and then use them for profit through the eldritch device. He simply can not grasp that people who "gave" him the eldritch device through the machinations of the world are not his friends. And the massive hackings should be clue.

Here's hoping that the eldritch device is able to sort and parse everyone into a peaceful co-creation without so much force.

Awk Awk Grep Grep Goooo Berkley. ;)

Oh regional Indian's picture

haaaaaaahh! Nice, the kind of writing I can grok easily.

But, it IS the Body Heph. And I can prove that to you beyond the slightest shadow of a doubt.

It is in fact ALL in the body. Everything else is a chimera.

When you have 5 or 50 minutes to spare...

The mind is the chimera, but in the 4 Dimensional world we in-habit, the body is absolute.

Planetary bodies, right? ;-)


Hephasteus's picture

Logic opposes religion.

Home opposes government.

The only way to create home and have a right logical path is to destroy reliigion and government.

Saturn and Jupiter are the gateway planets to the external. Every planet outside that is "outside" but forced inside.

obejoyful's picture

Cant tell if you are being sarcastic or not

steveo's picture

Free Charts!

ES, TF, Gold, Silver, Copper, Euro, Cable, and the Risk On / Risk off currency pair NZD/JPY

Drop a comment, sign up as a follower, haven't had a new follower in a month.   Easy and free.   And klik adz on free blogs that you like, it help pay some of the bills.


RobotTrader's picture

Market should be limit down based on all the dire news reported here day in day out.


Dow futures down a measly 34 points. Gold only down $5.

Bonds still at record highs as the clamoring for paper continues unabated.

Mr Lennon Hendrix's picture

You can take the night off, I got it from here.

SaveTheBales's picture

Ask and ye shall receive.  Let me borrow your phone, and they'll be limit down in 10 minutes.

Spirit Of Truth's picture

Sovereign credit downgrades are the equivalent of Fed rate hikes in yesteryear IMHO.  Since the latter are no longer possible, it's a matter or how far the private credit markets are willing to go in suspending reality.  The limit of credit creation is being reached whether the central planners like it or not.  Greenspan didn't understand the beast he sought to master:

RobotTrader's picture

By the way, the Yen continues to surge with a 260% Debt/GDP.


Bernanke better get going and start printing faster and faster.

Mr Lennon Hendrix's picture

Dare you question Bernanke?  He is a god among printers!

disabledvet's picture

more money than the War Machine could ever dream of.

bbq on whitehouse lawn's picture

So what makes the yen surge and the euro drop?  Critical thinking time.

If Japan inc sales are down in euros but flat in yen what does that mean Japan inc buys more or less euros?

Thats just one country with a global resession or slow down everyone will be doing less business with euros. So less demand for them.

Even if all other trades stay the same, witch they arn't.

So this year do you think that Japan will do more or less business in euros then last year?

Nothing to do with Ben or his printing press.

cranky-old-geezer's picture



By the way, the Yen continues to surge with a 260% Debt/GDP.

Go look up " trade surplus" and get back to us.

At 260% debt/GDP USD would be worthless.

redstar-br's picture

hmm, last time I checked JP had a trade deficit for 2011... and the whole aging population story isn't great for household savings either

derailedcapitalism's picture

Japan's balance of trade looks positive to me... 


Japan Balance of Trade


Japan's Trade Balance Seeing Red - The Economist

Everyman's picture

I can't believe how big a fraud and corrupt bunch of shit the furtures markets are!!1  They are down only 43 with all the speculative manipulations all day today!

Mr Lennon Hendrix's picture

The downgrades are priced in man!

ekm's picture

Nooooooooooooooooooo Man. In normal times of trading yes. But in this era of misinformation, nobody knows shit what they're doing.

barkingbill's picture

i think hes being sarcastic. 

Mr Lennon Hendrix's picture're harshing my mellow man.

disabledvet's picture

i thought it was "you're marshing on my hello...there, Marshmellow."

Randall Cabot's picture

Why isn't the futures market closed for the holiday?

Zero Govt's picture

because the holiday is tomorrow and the Futures Market is in the future

qqqqtrader's picture

LOL'd so hard... think I PPT'd in my pants

Last weeks Andys T in case you missed it, he must still be on holiday...

chump666's picture

Tight.  if Asia continues dumping their currencies and the EUR (and buying up USDs) should see EUR sliding into new lows.  It will become at some point bid-less.  Till the ECB step in

Anyone remember the May 10th Flash crash should recall that the EUR selling ping ponged off equities and this when QE2 was being pumped.  We have QE3 in a form of the massive swaps to the ECB and EZ banks via the FED.  But, Wall Street should get slammed to sh*t, because the CDS market will react to the down grades.  And banks flip on credit spreads moving against them...why?  Because those a-holes hedge on the credit/derivative market.  Also a volume less market while credit spreads haven't narrowed = liquidation trade.  USTs/USD will be bid.  VIX warning sign lows etc etc etc

Gap down, should wipe 100 + off dow, 20+ on the S&P. 

Cult_of_Reason's picture

Must Read:

Greece – Disagreement Everywhere, Rift in the Troika

The three Troika inspectors—Poul Thomsen from the IMF, Mathias Morse from the EU, and Klaus Mazouch from the ECB—are supposed to head to Greece next week to inspect its books; the budget deficit is once again higher than the revised limit that Greece had vowed to abide by. And they’re supposed to negotiate additional “structural reforms.” But there probably won’t be three inspectors, according to senior IMF sources. Missing: Poul Thomsen. The IMF has had enough.

Already, according to more leaks, IMF Managing Director Christine Lagarde had warned German Chancellor Angela Merkel and French President Nicolas Sarkozy that the fiscal and economic situation in Greece had deteriorated. Hence, the “voluntary” haircut on Greek bonds held by private sector investors should be increased to more than 50% to maintain the goal of bringing Greece’s debt load down to 120% of GDP. And the second €130 billion bailout package, agreed upon on October 26, should be enlarged by “tens of billions of euros.”

The German reaction was immediate. “There has to be a line somewhere,” said Michael Fuchs, deputy leader of Merkel’s party, the CDU. “This cannot be a bottomless barrel.” Even if Merkel were amenable to committing more taxpayer money to bail out Greece, she’d face a wall of opposition in her own party. And he wasn’t brimming with optimism: “I don’t think that Greece, in its current condition, can be saved,” he said.

Greece’s Extortion Racket Maxed Out

Zero Govt's picture

"Greece’s Extortion Racket Maxed Out"

Chuckle headline :)

Manthong's picture

 "haircut on Greek bonds held by private sector investors should be increased to more than 50% "

Whew!  For a minute I thought there would be something like a default happening. 

Cult_of_Reason's picture

Connect the dots:

(More than 50% haircut is needed, but they cannot even agree to a 50% haircut)


(As per IMF, €130 billion bailout package must be enlarged by “tens of billions of euros”)


(Merkel’s party leader, “This cannot be a bottomless barrel” and “I don’t think that Greece, in its current condition, can be saved”)


(Even Beatrice Weder di Mauro, member of Germany’s Council of Economic Experts confirmed that a breakup of the euro in 2012 “cannot be excluded")


(The IMF has had enough -- without the IMF, two remaining Troika inspectors will not be able to negotiate additional “structural reforms” and Greece will not get any more money)




Imminent Greek default +/- EZ breakup

Cult_of_Reason's picture

Also, ECB LTRO liquidity injections, NY Fed leaking QE3 rumors to CNBC Liesman, and EU/US Iran oil embargo delayed by six months, so they do not have to deal with two shocks, Greek default and embargo, at the same time.

The governments are preparing for an imminent Greek default.

Manthong's picture

It makes so much sense and it is the right thing to do..

which is why I have a hard time thinking it will happen.

Zero Govt's picture

CNBC (Asia time zone) is just about to tell us Jim Cramers 5 Tips on Making Money

Luckily i've an advance copy, here they are:

1). Pump & Dump: pump a stock to CNBC viewers Jim Cramer is running a loss on and hope viewers buy-in so Jim can unload (dump) his position at a small profit 

2). Pump & Short: pump a total dog to CNBC viewers and Jim shorts the fuk out of it

3). Pump & Suck: pump a stock of CNBC 'partners' and large advertisers and collect (suck) inside commission in a brown envelope 

4). Do the exact opposite of Jim Cramers advise 

5). Never listen to Jim Cramer (he's a twat)

Meremortal's picture


Any word on what Merkel meant with her statement on bonds? Seems to be confusion, perhaps she wasn't quoted correctly? 

bbq on whitehouse lawn's picture

Give a sweetheart deal to Insurance companies or other large holders. Then have eveyone who isnt a part of the sweetheart deal (hedge funds) get pissy and cry.

causeing the colapese of the deal and the end of another stupid idea.

Or just force everyone to hold for years or sell only to approved agencies who will set fixed prices on those bonds ( like a gold pool).

OR some other stupid idea that will only cause large holders to panic end sell before  they get stuck holding the bag.


Governments only tools are force or insentives. Im betting on kick the can so sweetheart deals untill they are proven unworkable like everything else they have tried.


Outlaw Of The Wasteland's picture

jerome kerviel's 5th anniversary.

RobotTrader's picture

I guess we get a brief selloff on Tuesday.


Then after that, the "market leaders" like LULU, TSCO, PNRA, CMG, etc. will surge even higher.

Riverboat Captain William O'Neil is probably getting rich with his IBD funds.