Europe

Two days after stocks slid in a coordinated risk-off session, and one day after a DOE estimate of US oil inventories sent US stocks surging while the failed Allergan-Pfizer deal unleashed torrential hopes of a biotech M&A spree leading to the single best day for the sector in 5 years, sentiment has again shifted, this time due to a violent surge in the Yen as the market keeps testing the resolve of the Japanese central bank to keep its currency weak, and so far finding it to be nonexistent.

The US is using a ‘mythical Russian threat’ to frighten Europe in order to justify increased defense spending according to Russia’s envoy to NATO “The United States and its representatives have repeatedly said that Russia poses a threat to the United States. Many said it was almost an existential threat, but the underlying reason, in my opinion, is obvious,” Russia’s permanent envoy to NATO Aleksandr Grushko, said in an interview with Russia Today They write: “The United States and its representatives have repeatedly said that Russia poses a threat to the United States.

Ever since the USDJPY breached the 110 support level three days ago for the first time in 17 months, the pressure on this all important FX carry cross has been rising, and then overnight, following the latest bout of recurring and increasingly ignored jawboning by various Japanese officials, the Yen soared, with the USDJPY plunging first below 109 and then moments ago dropping as low as 108.02 before rebounding modestly, dragging US equity futures lower with it.

In early January, European Commission President Jean-Claude Juncker warned that a Dutch advisory referendum, which took place today, on the bloc's association agreement with Ukraine could lead to a "continental crisis" if voters reject the treaty.