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