USD/JPY off the lows
It’s all emotion now.
USD/JPY is off the floor and up to 109.37 as support at 109.00 held. More broadly, there’s some bottom fishing going on in some equities. The Russell 2000 is below some critical levels today but is showing some life as it chews into the opening gap lower today. European equities are also showing a pulse.
You try not to read too much into every single move but this isn’t a market trading on clear data. The question is: How much to you fear covid-19 variants?
No market moves in a straight line but we’re going to be sorting this out for awhile. It was safe to ignore for many months but I don’t think that’s going to be the case going forward.
One chart that gives me a bit of optimism is Dutch covid cases. This is one of the ones that really sent off alarm bells in markets. Cases absolutely exploded after reopening in late June and at first blush the chart looks terrible but look at the extreme right of the curve and notice that cases have stopped rising.
One spot to watch might be the Olympics. We’re four days away from the opening ceremonies and if it really takes off there, it could dampen the mood considerably.