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Takeaway: The U.S. Dollar was down in the last two days of trading sending commodities up and Japanese equities down.

INSTANT INSIGHT: U.S. Dollar, Japanese Equities Crashing & Fed Rate Hikes - dollar crumbled

The simple summary of the last two days of trading goes like this:

Dollar Down = Reflation Up

It's that easy...

Here's additional analysis via Hedgeye CEO Keith McCullough in a note sent to subscribers earlier this morning:

"All it took was 2 down days for USD to ramp reflation, but this time to lower-highs for both the CRB Index (TAIL risk resistance = 192) and Oil – anything in the area code of consensus on jobs “probably” (her word) gives the Fed the greenlight they want on a rate hike (i.e. rate of change in labor market will still be slowing into that hike, which would be USD bullish from here)" 

INSTANT INSIGHT: U.S. Dollar, Japanese Equities Crashing & Fed Rate Hikes - rate hike cartoon 12.16.2015

Meanwhile, in Asia...

Yesterday it was China flash crashing. Today it's Japan getting smoked. Again, down Dollar is at play, this time wreaking havoc on Japanese equities. McCullough writes:

"No likey the Down Dollar, Up Yen move, eh? For your friends who think stocks can’t go down anymore, the Nikkei just lost another -2.3% overnight and -3.9% in 2-days, taking it right back into #crash mode at -21% since July. Into the jobs report, I say you book some gains on the short side of Japanese Equities, especially if USD Index holds this 94-95 level." 

Where does the U.S. Dollar go from here?

With future Fed rate hikes tethered to "improvements" in the labor market, all eyes are on tomorrow's Jobs Report. To be clear, barring some truly massive ramp in the non-farm payroll numbers, the trend in the jobs market will continue to fall off its February 2015 peak in rate of change terms.

Not that this matters to the linear, labor economists at the Fed. A headline beat would "probably" (Janet's own words) justify a rate hike in the coming months. And the simple summary goes like this:

Rate Hike => Dollar Up

More to be revealed