while the relentless debt crisis in the euro zone was certainly a contributor, as was the slowdown in China was likely on Friday unexpectedly poor U.S. labor data – suggesting that the US economy is not immune from global concerns, after all – that jarred Asian stock markets today. The Nikkei, Japan's large market shares, was 2% to a low of 6 months? the index has fallen approximately 19.3%, since the end of March, as is the situation in the eurozone and China are weighing heavily on Japanese exports. Meanwhile the wider Japanese Topix index slipped to a low 28-year loss of 2,1%.
Analysts expect tumbler that DAX and CAC40 of Europe would also hard at the beginning, with futures below 100 and 50 points, respectively. On Friday, the DAX closed 6, 050.29, 3.42%, while the CAC expire on 2, 950.47, loss of 2.21%. Couldn't help Wall Street, but play follow the leader, with the dropping to 12 DJ30 170.45, loss, 1.80%, the deviation of 1, 284.81 SPX500 points or 1.95% while the NASDAQ fell to 2, 765.42, a loss of 2,19%.
French merchant sibille28 hit a triple with three closed short positions advantageously, DAX, with profits 13.10 4.82% 9.31%. Swiss trader Paladium72, new OpenBook, scalped a small profit 1,87% on a short position in the CAC40 and a brief SPX500-4.00% profit a trader 3.1% allocation during the CAC40 returned 6.4% for the month. The merchant has posted a P/L for a week of 48.7% and for the month of 51.1%.
OpenBook trader anillochab managed to profit from the long side of a trade DJ30 twice, most recently posting a 10% profit on a long value only opened a few hours ago. The trader also had a strong position against hit of TP DJ30 Friday with an 11.82% profit.
Analysts expect tumbler that DAX and CAC40 of Europe would also hard at the beginning, with futures below 100 and 50 points, respectively. On Friday, the DAX closed 6, 050.29, 3.42%, while the CAC expire on 2, 950.47, loss of 2.21%. Couldn't help Wall Street, but play follow the leader, with the dropping to 12 DJ30 170.45, loss, 1.80%, the deviation of 1, 284.81 SPX500 points or 1.95% while the NASDAQ fell to 2, 765.42, a loss of 2,19%.
French merchant sibille28 hit a triple with three closed short positions advantageously, DAX, with profits 13.10 4.82% 9.31%. Swiss trader Paladium72, new OpenBook, scalped a small profit 1,87% on a short position in the CAC40 and a brief SPX500-4.00% profit a trader 3.1% allocation during the CAC40 returned 6.4% for the month. The merchant has posted a P/L for a week of 48.7% and for the month of 51.1%.
OpenBook trader anillochab managed to profit from the long side of a trade DJ30 twice, most recently posting a 10% profit on a long value only opened a few hours ago. The trader also had a strong position against hit of TP DJ30 Friday with an 11.82% profit.
Source: FXCM Marketscope – S&P 500 CFD The Market Impact To understand the impact, we should walk through the scenarios for impact. Having already suffered a significant drop, capital markets may find themselves somewhat exhausted and looking for a catalyst to spur a relief rally – whether it eventually turns out a correction or true trend reversal is likely beyond the scope of this event itself. With the 11:00 AM EST listing, the influx of capital and likely rally in share price could lift other industry competitors such as investor and hedge fund-favorite Apple. Such a boost against the belief that a correction is overdue could play as a spark for a pre-existing bias. Alternatively, this historic event for the equity market could lose its fight against the market’s prevailing fear. If, for example, another jolt of fear is leveraged by the European financial crisis or the realization that the Fed won’t rush to the market’s rescue in this current decline; the masses may ignore the temporary distraction. If there is no bounce to unload, then you sell at market. Though this is a very unique event, a parallel of influence can be made to the Google IPO back on August 19th, 2004. The day of the $1.67 billion offering itself did not offer immediate lift, but the lead up to the sale saw a significant change in direction (see the S&P 500 chart below). There are no doubt many factors that went into this tide shift, but the expectation of the event buoyed the market outlook. 
Source: FXCM Marketscope The Currency Impact If we can make the case for a meaningful shift in equities, it is an easy step to a heavy FX market influence. The balance of risk and reward is fundamental to every trade made. However, the sensitivity of different assets / currencies to the oscillation between fear and greed can vary. That said, when everything that is considered a safe haven rises and everything with any connection to higher yield (and thereby risk) sinks, we have an overwhelming sign that wholesale ‘risk aversion’ is driving the markets. That seems to be the case currently as stocks, speculative commodities and high-yielding currencies are all dropping while the US dollar and Treasuries (the accepted harbor for all financial storms) advance. You can see this relationship playing out in the chart below since 2008 and showing particularly strong correlation just over this past month. 
Source: FXCM Marketscope Therefore, if the S&P 500 garners a positive vibe from the Facebook IPO (capitalizing on the need for a correction), the positive sentiment drive could prove an equal weight to the safe haven US dollar. The Dow Jones FXCM Dollar Index happens to find itself in a very sensitive position as well (see the chart below). Having just breached 16-month highs this week, follow through is a tenuous bearing. It requires further encouragement. A positive drive for capital markets spurred by an influential catalyst could sabotage the fledgling move. 
Source: FXCM Marketscope – Dow Jones FXCM Dollar Index The risk of volatility to equities and the dollar can be applied to particularly risk-sensitive currency pairs. Below we see the correlation between the carry-intensive AUDUSD currency pair and the benchmark S&P 500 Index. This connection to a common fundamental driver (risk appetite trends) means that a sudden shift (or amplification of the prevailing trend) could spur both stock activity and capital flow in the carry trade intensive pairs. 
Source: FXCM Marketscope – Dow Jones FXCM Dollar Index The impact could prove just as significant for a more stalwart currency pair. EURUSD doesn’t have the attachments to yield income that its Australian counterpart does, but recent doubts over the financial health of the Euro-area have undermined the shared currency’s competition reserve status to the greenback. Therefore, reprieve would offer the batter euro a much needed rebound. That said, if the IPO proves a volatility inducement without an optimistic cut, the catalyst could prove painful for this FX benchmark. 
Source: FXCM Marketscope – Dow Jones FXCM Dollar Index A Last Word One last thing to consider: though the IPO itself happens very quickly, the impact on the markets could play out over a longer period of time. Post-IPO stock reactions often see immediate volatility as the regular investors plow in, there is a period of accumulation and then early adopters look to take profit resulting in a pullback. To tap into the underlying sense of risk appetite trend (a weighty market state), this event has to truly impress (for better or worse) and work with sentiment that is already inherent in the market. For that reason, we can have an extended impact from this event; but its true influence is as a catalyst rather than the momentum. --- Written by: John Kicklighter, Senior Currency Strategist for DailyFX.com To contact John, email jkicklighter@dailyfx.com. Follow me on twitter at http://www.twitter.com/JohnKicklighter To be added to John’s email distribution list, send an email with the subject line “Distribution List” to jkicklighter@dailyfx.com. 
