By Greg Peel

The Dow fell 216 points, or 1.4% to under 15,000 for the first time since May 7. The S&P fell 1.4% to 1608 and the Nasdaq dropped 1.3%.

Yesterday Australia's March quarter GDP release showed 0.6% quarterly growth for 2.5% annual growth, down from 3.1% in 2012 and below the 2.7% expectation. It was a disappointing result, but not the reason the Australian stock market fell yesterday. The ASX 200 was as low at 11.30am as it would be for the day.

The ASX 200 fell because the Aussie dollar was 1.2 cents lower over 24 hours. Whenever the Aussie falls, foreigners sell stocks. Whenever the Aussie bounces, the market stands still. When foreigners sell Australian assets they must sell Aussie dollars. Until this feedback loop runs itself out and stability returns, a weaker Aussie will spark more selling.

The GDP number may not have affected the stock market, but it did increase expectations for another RBA rate cut sooner rather than later. Hence the Aussie fell again, and is down another cent over 24 hours. Buckle up. The SPI Overnight is down 47 points.

Adding to weakness in Australia is weakness in Japan, where yesterday the Nikkei fell another 3.8%. The impetus for this fall was disappointment over Shinzo Abe's announced blueprint for structural reform. Abe's ambitious plan to lift Japan out of the deflationary doldrums involves "three arrows": monetary policy, fiscal policy, and structural reform. Yesterday Abe announced various ambitious structural reform intentions but was light on detail, and failed to address long hoped for labour market reform. Wage reform is seen as the critical element in any structural reform agenda. Abe did not deliver.

Some statistics. The Nikkei rallied 84% from November to its May high and has now corrected 18%, reducing the rally to 50%. The ASX 200 rallied 21% to May and has corrected 7.9%, reducing the rally to 11.5%. The S&P 500 rallied 25% to May and has now corrected 4.7%, reducing the rally to 19%.

Wall Street is the correction laggard, but last night's drop suggests perhaps the time has come.

Wall Street's fall was primarily prompted by two factors. ADP reported 135,000 private sector jobs were added in May. This was up from 113,000 in April, but below expectations of 170,000. And the Fed Beige Book, an anecdotal assessment of the economic performance of the twelve Fed regions, featured a downgrade.

Last year the Beige Book described the US recovery as "modest", but later upgraded that assessment to "moderate".