This morning, the S&P 500 Index e-mini futures (ES-M3) are trading higher by 7.75 points to 1634.75 per contract. It seems that the major stock index futures are holding up ahead of the opening bell. All of the global markets are intertwined and last night the Nikkei 225 Index (Japan) rallied off of its gap lower open to close down by just 29.0 points. While this may not seem like a big deal to many it is important to note that at the low of the session the Nikkei 225 Index was trading below 13,000, it finished at 13,289.32.
While many traders and investors are looking at the Nikkei 225 Index it is really the USD/JPY that is moving markets around the world. When the Japanese Yen strengthens against the U.S. Dollar the major stock indexes around the world come under pressure. This is very evident by looking or overlaying a chart of the USD/JPY and the SPDR S&P 500 Trust (SPY), they trade in lockstep with each other. Other equities such as the SPDR Dow Jones Industrial Average (DIA), and the iShares MSCI Japan Index (EWJ) will usually follow the same pattern.
Below you may find the video.