by Chris Becker
Are European stocks turning Japanese? The very high correlation between the USDJPY and the Nikkei 225 stock market has long been observed, where a weakening Yen supports higher stock prices (and vice versa, obviously):
And now it looks as long positions in USD unwind and QE begins in Europe, which is ultimately deflationary, the Euro is pushing European stocks the same way.
Here’s an interesting chart courtesy of Callum Thomas:
If you’re a local investor and are thinking “So what?”, well look closely at this chart and tell me the difference between Australian bank stocks and the main component of the EuroStoxx 600, the German DAX: