It was all going so well. It appeared the "market" had decided that this was not weather-related (as we showed) but real weakness and that real weakness can mean only one thing - a fickle Fed re-primes the pump by un-tapering the taper. However, as we noted last night, it is Jon Hilsenrath of the Wall Street Journal that creates the "common knowledge" upon which we should act [3]. The bounce in stocks was evidently hope of the un-taper for as Hilsy noted in a Q&A [4] that the "Fed is likely to stick to its course on rates and bond-buying in the wake of the mixed jobs report," stocks, USDJPY, and Emerging Market FX started to fade.
Bonds never bought the un-taper by the look of it...
[5]
And EM FX started to fold pretty quickly...
[6]
as, of course, JPY is in charge...
[7]
Charts: Bloomberg