Archived IMT (2010.08.11)

WHAT A DIFFRENCE 24-Hrs MAKES. Recapping why the stocks are down and both USD and JPY are up; MORE CHINESE DATA DISAPPOINTMENT sent Asian & European equities lower after a brief reprieve to risk appetite in late Tuesday US following the Feds announcement to buy more treasuries. US dollar was fired up as commodity currencies extend sell-off on concerns with a slowing China. Jul Indus production slowed to 13.4% y/y from 13.7%, retail sales slowed to 17.9% y/y from 18.3%, CPI rose to 3.3% from 2.9% mainly on floods impact. Combining the Feds prolonged downgrade of the US economy with further signs of a slowing China weighed significantly on the risk trade to the benefit of the safe haven USD & JPY (especially JPY). *** This is particularly the case when stocks undergo a sharp decline from 3-month highs. This is another case of unwinding of the carry trade.*** FOUR CHARTS IN ONE*** http://chart.ly/s8qbhr