The NY session witnessed a total washout for risky assets. This was a welcome sign for the bears that see the current rally as long in the tooth. US equities shed more than -1.3% in broad terms but the recent correlation between stocks and currencies broke down a touch. Despite what was a beaten down equity market for the better part of the session, EUR/USD managed to rally from a NY open near 1.4860 towards the 1.4920/30 area as we write. USD/JPY meanwhile traded in tandem with Treasury yields, following the 10-year rate down to the 88.65/60 lows before recovering only to find resistance ahead of 89.00 currently. Gold suffered hefty losses early in the session as the precious metal squeezed down towards the $1130 area. Traders eventually shrugged off the US dollar strength and carried gold back towards flat on the day by $1145/46.

Even better economic data couldn't help stocks today. The Philly Fed manufacturing index blew away expectations, coming in at 16.7 in November versus expectations for a 12.2 print. The details of the report were stronger than the headline as well. New orders jumped to 14.8 from 6.2 while shipments popped to 15.7 from 3.3 the prior month. The employment component also showed significant improvement to -0.5 from -6.8 last month and -14.3 the month before that. Speaking of employment, the average workweek index rose to 2.0 from -4.7 and the first positive print since 2007. This improvement in what is a leading indicator of economic activity should have helped risky assets find a short-term bottom †so much for that!

Looking ahead to the Asia session, we have New Zealand credit card spending and the Bank of Japan rate decision due up. Both events should elicit little in the way of price action but if global equity marts follow US shares into the depths, look for the US dollar to come back better bid on the follow.