The Big Picture: Feb 8, 2016

I’ve been beating the yen carry trade drum so long, I can’t remember when it didn’t matter.  Today, as on Jan 20, USDJPY has dropped below the bottom of the red channel.  And, stocks are not amused.  S&P futures were off over 31 points overnight before attempting the latest bounce.2016-02-08 USDJPY v ES daily 0530ES has dropped 100 points since USDJPY reversed at our upside target on Jan 29 following the BoJ’s ill-fated attempt to turn things around [see: BoJ Underwhelms.]  Now, as USDJPY drops through the channel bottom again, the “market’s” fate rests on whether or not the central planners will elevate the USDJPY yet again.

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