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Dead–Cat–BounceDies As NikkeiDropsOver 400 PointsFromUSHighs
Mixed data from Japan did nothing to excite and while markets oscillated for a few hours after the US close (and subsequent pile-driver from AMZN), they are now unwinding most of the dead-cat-bounce seen during the US day-session. Japanesestocks are backatfresh 2-monthlowswiththeNikkei 225 under 15,000 (downover 400 pointsfromday-sessionhighs) and testing debt-ceiling lows. JPY strength has driven USDJPY back below 102.50 and therefore USfutures are re-tumbling – down 14 pointsfromUSday-sessionhighs. EM FX is drifting lower. With China about to dark for a week for lunar new year, this could get interesting very fast.
Dow futures are pressing towards pre-Taper lows… and Japan has lost support back to the debt-ceiling lows…
Of course, it’s all about the JPY… for Japanese stocks (though the correlations are started to creak – which will be a huge worry for Abe)
and the same for US futures…
Charts: Bloomberg