<p style=““ class=“text-align-justify“>With Europe having to play catch up to the washout in Wall Street yesterday, US futures are finding some relief at least but the question seems to be how long can it last?</p><p style=““ class=“text-align-justify“>The snapshot of the performance of US stocks yesterday was abysmal to say the least with the S&P 500 closing down 4.3%, Nasdaq down 5.2%, and the Dow down 3.9% at the end of the day. For the latter, it is the lowest daily close since 18 July while the former two are closing in on their 6 September lows respectively.</p><p style=““ class=“text-align-justify“>In the case of the S&P 500, that coincides with the 61.8 Fib retracement level of the bounce from June to August near 3,900. The confluence of support levels will make it more interesting, with a break below that likely to set off the next downside leg for equities.</p><p style=““ class=“text-align-justify“>For now, there is some bit part relief with S&P 500 futures up 0.5%, Nasdaq futures up 0.6%, and Dow futures up 0.4%. However, with US PPI data and Wall Street set to enter the fray later, the picture might easily turn around if Fed fears are reignited in the second-half of the week.</p>

This article was written by Justin Low at forexlive.com.

<ul><li>If Tokyo were to intervene, it will do so swiftly and without pause</li><li>Usually will not confirm if it had intervened, even after doing so</li><li>No comment on BOJ rate check</li><li>Will not rule out any options (when asked about chance of FX intervention)</li><li>Government watching FX moves with high sense of urgency</li><li>If yen continues such moves, we will take necessary action</li></ul><p style=““ class=“text-align-justify“>They have certainly stepped up the offensive in terms of jawboning the market, with officials coming out today in full force pretty much. That said, the rhetoric is getting a bit tiresome rather quickly considering the frequency and that might see markets shrug off the threats after a while. In my view, this is the limit to their verbal intervention and that seems to be around the 145.00 mark for USD/JPY.</p>

This article was written by Justin Low at forexlive.com.

<ul><li>Prior +0.7%</li><li>Industrial production -2.4% vs +0.4% y/y expected</li><li>Prior +2.4%</li></ul><p style=““ class=“text-align-justify“>That’s a big miss on estimates as euro area industrial output slumped heavily in July. Looking at the details, production of capital goods fell by 4.2%, durable
consumer goods by 1.6% and intermediate goods by 0.8%, while production of energy rose by 0.4% and nondurable consumer goods by 1.2%.</p>

This article was written by Justin Low at forexlive.com.