A Close Look At Monday’s Key Market Events

A Close Look At Monday’s Key Market Events

$EWJ, $DXJ, $NKY

At the weekend Japan released its preliminary report for January industrial production and it may make a difference in moving capital markets Monday morning.

I. Japan’s Industrial Production Report for January came out Sunday, 28 February at 6:50p EST

Note: Japan’s January Industrial Production +3.7% M-M (expected 3.3%; last -1.7%)

January Retail Sales -0.1% Y-Y (consensus 0.5%; last -1.1%), and January Housing Starts +0.2% Y-Y (consensus –0.2%; last -1.3%)

Why it is important

  1. This report will help fuel expectations for Japan’s Q-1 GDP growth
  2. Industrial production declined in both November (-0.9%) and December (-1.7%). A 3rd straight decline in industrial production will fuel market concerns about an economic slowdown in Japan.
  3. The results of this report will help drive market expectations with respect to the Bank of Japan’s policy course
  4. Another disappointing report will fan worries about a spillover/contagion effect in the region that could have global ripple effects. An uplifting report could temper those concerns near term.

A closer look

What is in play?

Japan ETFs

  1. iShares MSCI Japan ETF (EWJ)
  2. Japan Hedged Equity Fund (DXJ)
  3. Currency Hedged MSCI japan ETF (HEWJ)
  4. MSCI Japan Hedged Equity Fund (DBJP)
  5. MAXIS Nikkei 225 Index Fund (NKY)

Regional ETFs

  1. iShares China Large-Cap ETF (FXI)
  2. ProShares UltraShort FTSE China 50 (FXP)
  3. iShares MSCI South Korea Capped ETF (EWY)
  4. MSCI Australia ETF (EWA)
  5. iShares MSCI Singapore ETF (EWS)
  6. MSCI All Country Asia, ex Japan, Fund (AAXJ)

Currencies

  1. USD/JPY
  2. EUR/JPY
  3. AUD/JPY

US Treasuries

Japanese Government Bonds

S&P Futures

II. Economic Reports

Monday the economic reports to the market include: Chicago PMI for February (consensus 52.0) and Pending Home Sales for January  (consensus +0.7%) will be released at 9:45a EST and 10:00a EST, respectively.

III. Earnings Reports

N/A

Have a terrific week.

Paul Ebeling

HeffX-LTN

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