The Shanghai Index - Make It or Break It?

The Shanghai Index continued to moved higher, as discussed in a previous post in January, reversing in April from the falling dowtrend (as shown in the weekly chart above). The index is approaching the apex of a huge rising wedge which usually have bearish resolution when broken down.

Nevertheless, as we notice in both the weekly chart (above) and the daily chart (below), the index is testing a daily uptrend line (just above the weekly wedge uptrend line), the rising daily SMA200, the flat weekly EMA50 and the last Fibonacci retracement (which held in the previous two circled instances). The area formed by the mentioned elements around 2800 is key support which if broken, can have strong bearish consequences. Make it or break it?

Key Global Events - The Week Behind and Ahead On May 15th

Big Picture succinct summation of week’s events (ending on May 13th):

Positives:

1) UoM confidence jumps back to average level of the year as one year inflation expectations dip to 4.4% from 4.6%

2) 5 month low in mortgage rates leads to 9% jump in refi’s and 6.7% rise in purchase application

3) Germany and France lead solid Q1 GDP growth for Euro zone but sustainability in question

4) Hong Kong economy grew 11.2% annualized in Q1

5) China again raises reserve requirements after 5.3% CPI print and greater than expected loan growth.

Negatives:

1) CPI, PPI continue to rise with CPI now back above 3% y/o/y

2) Inflation takes bite out of April retail sales as sales ex gasoline rise just .2%

3) Initial Jobless Claims above 400k for a 5th straight week and 4 week average now at the highest since Nov

4) Weak US$, energy prices and higher Chinese labor costs lead to 11.1% y/o/y gain in Import Prices

5) NFIB small business optimism index falls to lowest since Sept with most growth categories lower and price index higher

6) BoE’s King says UK in stagflationary environment, is it headed here?

7) Political infighting amongst the EU, IMF, ECB and individual country members continue to drag out the fate of the Greek’s.

Goldman lists the key economic events in the upcoming week, which will likely be dominated by news of the surreal IMF scandal that has taken the financial world by storm.

Last week’s flow of cyclical data was broadly encouraging. However, cyclical currencies traded weak against the USD. In addition, the Greece situation stood at the forefront of market attention. This week will offer us more on that front with the Ecofin/Eurogroup meetings on Monday. Other than that, we have important cyclical data this week with the Philly Fed on Thursday standing out as the key forward-looking indicator. It will also be interesting to watch trends in initial claims, which has been volatile recently. Finally, Fed Chairman Dudley’s speech will be interesting to follow, together with FOMC minutes.

Monday May 16th:

Ecofin/Eurogroup meeting will be key to watch in terms of ongoing developments in the management of the Greek crisis.

US May Empire Manufacturing Survey. The week starts with one of the interesting regional manufacturing surveys in the US. Consensus expects a moderate decline to 20 from 21.7.

Hungary Monetary Policy Meeting. We do not expect rate hikes from the NBH, in line with consensus.

Also interesting: US May Home Builders Survey May, TIC DATA, Poland March Current Account.

Tuesday May 17th:

UK April CPI. We will watch UK inflation data closely in order to assess the likelihood of tighter financial conditions in the UK going forward. For the next CPI release, GS expects a print of about 0.7%, slightly below consensus of 0.8%.

US Housing Starts. We expect housing starts in April to have increased by 5% mom vs consensus expectations of 3.8%.

US IP: We expect IP to have increased by 0.5%mom in April, close to consensus expectations of 0.4% mom.

Also interesting: Australia RBA minutes, South Africa April CPI, Apr & March Retail Sales.

Wednesday May 18th:

UK MPC Minutes: Watching the ongoing developments in the balance of opinions within the MPC and the assessments on growth and inflation dynamics will be key in order to assess the balance of risks to rates, which will also be significant for price action in the GBP as well.

US FOMC Minutes will likely provide more insight into the balance of opinions within the FOMC.

Fed Speakers: St Louis Fed Pres Bullard

Also interesting: Japan Tankan, Malaysia CPI Apr, GDP Q1

Thursday May 19th:

US Philadelphia Fed. Philly Fed is among the key leading indicators ahead of the ISM and a significant input to our own Global Leading Indicators. We expect a rebound from last month’s low print of 18.5. This month will likely come in at 22, mildly above consensus of 20.

US Jobless claims

Fed Speakers: NY Fed Pres Dudley

Also interesting: US April Existing Home Sales


Sources:

Succinct Summation of Week’s Events (5.13.11)
A Look At Key Global Events In The Upcoming Week

BETXT Index Correction

The last year high target (around 620) was not reached as expected and discussed in a previous post, the index reversing at the less known 78.6% Fibo level as shown in the weekly chart above and daily chart below.

During last week the index was also affected by dividend adjustments that sealed the break of the daily EMA50 support. Though the negative influence of the dividends may be seen artificial to the index and stocks in general, the collective market memory is not adjusted for dividends and is more likely to react to the same technical levels existing before adjustments. The same rationale is also applied to index composition changes (e.g. recent FP inclusion).

The downtrend should be halted in the important 500 points area (round number, rising daily SMA200 and 1-year recovery uptrend line + rising weekly EMA50) unless long term monthly uptrend is broken and reversed.

Quantitative versus Fundamental Investing

Source: Quantitative versus Fundamental Value

Potential EURRON Reversal

The correction in EURRON downtrend mentioned in a previous post proved to be the potentially 4th corrective wave of the 5-wave downtrend. The pair reversed from just shy of targeted 4.15 and melted down to marginally new lows towards last year targeted lows (around 4.06) in a clear divergence with the rising price oscillator (MACD). This set-up resolution was the short term reversal and the potential end of the 5th wave (not a harmonic one, though) which is usually followed by an a-b-c correction higher towards 4.15 and perhaps 4.19 later on.

CRB Index Long Due Correction

The long and strong weekly uptrend in CRB Index mentioned in a previous post could not push past the magic 61.8% Fib retracement (turned unbreakable resistance diligently tested by the index during the last two months) and broke down with fireworks.

Nevertheless, we see still little damage to the weekly chart above despite the long red candle down. The steep uptrend just broken is usually replaced by a less steep one and the ongoing correction could be an opportunity to buy.

Looking at a daily chart below we see a 3-push higher bearish pattern with potential correction target around 320 which may be a good risk/reward level to go long.

US 10-year Treasury Yield Bearish Fakeout

In a previous post I highlighted the bullish potential breakout of the US 10-year Yield Note but it turned out to be a false breakout just two days after. It was an early warning sign of the commodities, dollar and equities markets last week's corrections due to the break in the cemented inter-market (asset classes) relationships: bonds down (yields up), dollar down, commodities and equities up.

In the weekly chart above we notice new lows for the yields piercing the last Fibo fan level and potentially heading even lower towards 2.9 if this area gives in. In the daily picture below we see a monthly three push higher which usually has a bearish resolution. A clear downtrend is in the process with potential target 3.05 - 3.10 area (SMA200, 50% retracement and 21-day cycle line). Below we have the mentioned 2.9 (last Fibo retracement and previous congestion area).

EURUSD Uptrend Correction

As noted in a previous post, EURUSD moved higher and reversed just shy of the 1.5 target last week. The correction was harsh but the uptrend is intact as shown in the updated weekly chart above.

In the daily chart below we notice that EURUSD broke the uptrend correcting right on the cyclic time. Nevertheless, the area in the 1.40 -1.43 should prove strong support for the longer term uptrend and a base for a new leg higher to challenge the recent highs. A break below 1.40 is bearish medium term.

Key Global Events - The Week Behind and Ahead On May 8th

Ritholtz's succinct summation of week's events (ending on May 6th):

Positives:

1) US April payrolls rock as private sector leads way, Canadian jobs report rock even more

2) Both retail comps and vehicle sales in March exceed expectations in the face of continued cost of living pressure

3) ISM mfr'g falls a touch but is better than estimated

4) For most companies and consumers, commodity prices break lower, $ bounces after Trichet comments and another week closer to the end of QE2

5) Bin Laden dead

Negatives:

1) Household survey says jobs fell for 1st time since Nov '10, unemployment rate rises to 9% as a result. I know adds confusion to payroll report

2) Slowing global growth as another key reason for commodity break as India, Malaysia, Philippines and Vietnam all raise interest rates, copper breaks slightly below 200 day moving average, Sensex index down 3.2% on the week, Shanghai index down 1.6%

3) China state sector weighted mfr'g PMI 1 pt below expectations

4) ISM services index falls sharply to the weakest since Aug '10 at 52.8

5) Initial Jobless Claims above 400k for a 4th straight week

Key events in the upcoming week, from Goldman Sachs

The week begins with the China – US Strategic and Economic Dialogue (Monday and Tuesday), which will be held in Washington, DC, and will no doubt once again include discussion of the pace of appreciation of CNY against US$. The week also brings a slew of China data, including the trade balance, where consensus expects a small surplus (far below the historical average surplus), and CPI inflation for April, which we see at 5.1% yoy, slightly below consensus. The week ends with the US CPI, where we expect another unfriendly CPI report, with headline CPI rising by 0.39% mom in April, essentially in line with consensus.

Monday May 9th

China – U.S. Strategic and Economic Dialogue (Monday and Tuesday) These meetings will be held in Washington, DC, and will no doubt include discussion of the pace of CNY appreciation against US$.

Taiwan Trade Balance (Apr) According to the latest trends from export orders, we have seen some front-loading of export demand, likely due to the uncertainties over supply chain disruptions in March. April data will allow us to better gauge the extent of this front-loading.

Mexico INPC Inflation (Apr) We expect headline to come in at 3.33% yoy in April, up from 3.04% yoy in March. This is essentially in line with consensus, which is looking for a rise to 3.32% yoy.

Tuesday May 10th

China Trade Balance (Apr) We expect April export growth to moderate to 30.0% yoy, down from 35.8% yoy in March. This is a touch above consensus (29.5% yoy). We expect import growth to rise to 28.0% yoy, up from 27.3% yoy previously. Consensus here expects growth of 28.9% yoy. Consensus expects a trade surplus of $3.2 bn in April, up from $0.1 bn in March. This is still far below the historical average of around $20-25 bn.

Wednesday May 11th

China CPI, IP & FAI (Apr) We expect CPI inflation to fall to 5.1% yoy, down from 5.4% yoy in March. This is below consensus, which is looking for a reading of 5.2% yoy. Our forecast for IP is 15.0% yoy, up from 14.8% yoy in March and above consensus of 14.6% yoy. We are in line with consensus on fixed asset growth, expecting FAI to grow 24.9% yoy, down from 25.0% yoy in March.

Bank of England Inflation Report reflecting the weakness of Q1 GDP data and a 20% rise in Sterling oil prices since the February meeting, projected growth in 2011 is likely to be revised lower and inflation is likely to be revised higher. In the past two years, Governor King has often struck a more dovish tone at the press conference than is reflected in the subsequent MPC Minutes (released one week later).

Poland Central Bank Meeting We are looking for a hike of 25 bps to 4.25%. Consensus expects the base rate to remain unchanged at 4.00%.

United States Trade Balance (Mar) Consensus is looking for a trade deficit of -$47.0 bn, slightly wider than the -$45.8 bn in March. We look for a wider trade deficit of -$48.0 bn, due to higher nominal imports of petroleum products. The trade report could result in revisions to Q1 GDP.

Mexico Q1 Inflation Report

Thursday May 12th

Indonesia Central Bank Meeting Given softer-than-expected inflation in recent months, we expect Bank Indonesia to pause again in May, following pauses in March and April. This is in line with consensus. We expect the central bank to hike the policy rate by another 50 bps for the remainder of this year, taking the policy rate to 7.25% by end-2011 (from the current level of 6.75%).

South Africa Central Bank Meeting We are in line with consensus and expect the policy rate to remain unchanged at 5.50%.

Norway Central Bank Meeting In line with consensus, we expect a 25 bps hike to 2.25%.

United States Initial Claims (May 7) Consensus expects initial claims to come in at 428k, down from the elevated 474k reading the previous week.

United States Retail Sales (Apr) We forecast that retail sales increased by 1.0% mom in April, or 0.7% excluding motor vehicles. Both figures should benefit from the increase in gasoline prices during the month, which raises the nominal value of sales at filing stations. April chain-store sales results were encouraging, but need to be treated with caution due to shifts in the timing of Easter. Consensus sees growth of 0.6% mom for headline retail sales, following growth of 0.4% mom in March. Retail sales excluding autos are expected to grow 0.6% mom, following growth of 0.8% mom in March.

Friday May 13th

Korea Central Bank Meeting We expect the Monetary Policy Committee to raise the policy rate by 25 bps, with a continued hawkish bias. Consensus also expects a 25 bps hike.

Euro Zone GDP (Q1) We forecast growth of 0.7% qoq, above consensus, which is looking for a reading of 0.6% yoy. Growth in Q4 was 0.3% qoq.

Poland CPI (Apr) We expect inflation to come in at 4.4% yoy in April, below consensus of 4.5% yoy, following a reading of 4.3% yoy in March.

United States CPI (Apr) We expect another unfriendly CPI report this month. Specifically, we forecast that the all-items CPI rose by 0.39% mom in April, essentially in line with consensus (0.4% mom), and that core increased by 0.19% mom, also in line with consensus. Our forecast for a rise in the core (from a gain of 0.14% in March) primarily reflects higher apparel and medical care inflation.

Sources:

Succinct Summation of Week’s Events (5/6/11)

Key Events In The Upcoming Week: US And China Trade Balance And Inflation Data

Long Term US Dollar Index Annotated Chart

Source: Annotated US Dollar Index by David Singer

Key Global Events - The Week Behind and Ahead On May 1st

Ritholtz’s succinct summation of short week’s events:

Positives:

1) Great tech earnings buoy stocks
2) Existing home sales 100k annualized above est
3) Housing starts and permits bounce, good for construction
4) Purchase component in MBA data rises 10% to 19 week high
5) Euro zone mfr’g and services index remain solid
6) Sweden, Thailand and Brazil raise rates and China raises reserve requirements again
7) German PPI rises a robust 6.2% y/o/y but below estimates

Negatives:

1) The balance sheet of the United States of America gets a pop across the head
2) US$ value continues to erode, gold and silver roar higher
3) Philly Fed mfr’g moderates as rising prices create pressure
4) Initial Jobless Claims above 400k for a 2nd straight week
5) NAHB home builder sentiment fall 1 pt to still pathetic 16
6) Housing starts and permits bounce, we don’t need so many new homes
7) Canada CPI up 3.3% y/o/y, well above estimates of 2.8% and compares with a 1% benchmark rate
8) Yields in Greece, Portugal and Ireland go parabolic

Source: Succinct Summation of Week's Events

S&P500 Recovery Continues

The S&P500 weekly chart above depicts a bullish picture bouncing to and from Fib retracements and extensions. Last week the 1350 resistance was broken on the third attempt heading towards 1440 area and possibly even higher towards the 2007 all time high.

Nevertheless, the daily picture below shows that the recent leg higher could also be the 5th and last one targeting the 1400 - 1440 resistance area until around mid May. A longer and deeper correction could follow afterwards. "Sell in May and go away!" could be a good advice once again!

Niels Jensen’s Confessions of an Investor

The problems with Modern Portfolio Theory (MPT)

“..I would like to spend a moment on MPT, as I believe it is important to understand the shortcomings of the prevailing approach to investment and risk management. [..] Let’s take a closer look at three of the most important assumptions behind MPT (there are many more assumptions behind Modern Portfolio Theory. Wikipedia is a good place to start should you wish to read more about it):

1. Risk-free investments exist and every rational investor invests at least some of his savings in such assets, which pay a risk-free rate of return.

2. Returns are independently and identically-distributed random variables (returns are trendless and follow a normal distribution, in plain English).

3. Investors can establish objective and accurate forecasts of future returns by observing historical return patterns. Strictly speaking, this assumption was relaxed by Fischer Black in 1972 when he demonstrated that MPT doesn’t require the presence of a risk-free asset; an asset with a beta of zero to the market would suffice.

Well, if these assumptions are meant to stand the test of time, then good old Markowitz (the father of MPT) is in trouble. Truth be told, none of the three stand up to closer scrutiny. The concept of risk-free investing no longer exists, post 2008. Banks are giant hedge funds which cannot be trusted and even government bonds look dicey in today’s world. Secondly, returns are clearly not random. If you have any doubts, just look at how the trend-following managed futures funds make their money. Thirdly, from 26 years of investment experience, I can testify to the fact that historical returns provide little or no guidance as to the direction of future returns.

A new approach is required.

So what does all of this mean? First of all it means that universities and business schools all over the world should clear up their acts. Two generations of so-called financial experts have been indoctrinated to believe that MPT is how you should approach the management of investments and risk whereas, in reality, nothing could be further from the truth. It also means that investors should kick some old habits and re-think how they do their portfolio construction. Specifically, it means that: [..]

i. the notion of the “market portfolio” being an appropriate performance benchmark should be discarded;

ii. there is in reality no meaningful distinction between strategic and tactical asset allocation – the difference is illusory;

iii. investors should once and for all reject the notion that there is an optimal portfolio for each investor from which he or she should only deviate “tactically” in the shorter run;

iv. market timing deserves more credit than it is given;

v. MPT is a straitjacket preventing investors from rotating between different classes of risky assets (with vastly different risk/return profiles) as market conditions change.

Please note that this does not imply that asset allocation is irrelevant. Far from it. However, it does mean that a bespoke approach to asset allocation, where individual circumstances drive portfolio construction, is likely to be superior to a more generic approach based on a strategic core and a tactical overlay.

[..]

A solution to the problem

Here is what I would do in terms of applying his thinking into a modern day investment approach:

1. Do what you do best. Some investors are made for short-term trading. Others are much more suited for long-term investing (like me). Don’t be shy to utilize whatever edge you may have. MPT suggests that markets are efficient. Nothing could be further from the truth. If you have spent your entire career in the medical device industry, the chances are that you understand this industry better than most. Use it when managing your own assets. Insider trading is illegal; utilizing a life time of experience is not.

2. Take advantage of mean reversion. Mean reversion is one of the most powerful mechanisms in the world of investments. At the highest of levels, wealth has a long term ‘equilibrium’ value of about 3.5 times GDP. As recently as 2007, wealth was well above the long term equilibrium value and signaled overvaluation in many asset classes. But be careful with the timing aspect of mean reversion. The fact that an asset class is over - or undervalued relative to its long term average tells you nothing in terms of when the trend will reverse. A good rule of thumb is to buy into asset classes when they are at least a couple of standard deviations below their mean value.

3. Be cognizant of herding. We are all guilty of keeping at least one eye on other investors, and we are certainly guilty of letting it influence our own investment decisions. This is how investment trends become investment bubbles and fortunes are wiped out. Herding is relatively easy to spot despite the fact that former Fed chairman Alan Greenspan argued otherwise – probably because it was a convenient argument at the time. But herding is also subject to the greater fool theory. You can make a lot of money investing in fundamentally unsound assets, as long as you can find a greater fool to whom you can sell it at a higher price. It works fine but only to a point.

4. Think outside-the-box. All those millions of baby boomers all over the western world who will retire in the next 10-15 years have been told by the MPT-trained financial advisers that they need to lighten up on equities and fill their portfolios with bonds, because they need the income to live on in old age. STOP! Who says that bonds can’t be riskier investments than equities? When circumstances change, you should change your investment approach accordingly and not rely on historical norms. Given the state of fiscal affairs in Europe and North America, it does not seem unreasonable to suggest that circumstances have indeed changed.

5. Bring non-correlated asset classes into the frame. One should consider having a core allocation to non-correlated assets. Traditionally, many non-correlated asset classes have not met the liquidity terms required by the majority of investors [..], but there are exceptions, the most obvious one being managed futures. The asset class proved its worth in 2008 with managed futures funds typically up in the range of 20-30% that year.

6. Take advantage of investor constraints and biases. The classic, but by no means only, example is the outsized impact a downgrade to below investment grade (i.e. a credit rating below BBB) may have on corporate bonds, as some institutional investors are not permitted to own high yield bonds and are thus forced to sell regardless of price when the downgrade takes place.”

Source: Birthdays and Investment Risk.

Inflation Explained

Key Global Events - The Week Behind and Ahead On April 17th

Ritholtz's succinct summation of week's events (04-15-2011)

Positives:

1) Retail Sales in March were good, notwithstanding rising gasoline and food prices
2) NY mfr'g survey in April rises to 1 yr high but with rising prices paid and received
3) Apr UoM confidence bounces 2 pts from lowest level since Nov '09 with still elevated 1 yr inflation expectations
4) China reports stronger than expected Q1 GDP, retail sales and IP but also higher than forecasted CPI and PPI
5) Singapore tightens policy to fend off higher import prices

Negatives:

1) US CPI rises 2.7% y/o/y, most since Dec '09 and Import Prices rise 9.7% y/o/y
2) Initial Jobless Claims rise back above 400k for the 1st time since early March
3) Higher than expected trade deficit and lower than expected rise in business inventories send Q1 GDP forecasts down to around 2%
4) NFIB small business optimism index falls to 5 month low as price pressures rise, and plans to hire, expectations of better economy and better sales fall. Cap ex component did rise
5) Soft start to Q1 earnings season as seen with AA, JPM, GOOG and BAC
6) Yields in Greece, Portugal, Ireland and Spain all rise as clock ticks on inevitable timing of Greek debt restructuring. Greek 2 yr yield up 225 bps on the week and CDS goes to record high
7) Gold at record high, direct indictment of Fed policy

Goldman summarizes the past week, and forecast the next 4 business days (Friday is a holiday)

What Matters in FX This Week : Business Surveys in Europe and Turkish Central Bank Meeting

From a macro perspective, last week's data offered a slightly more positive mix of growth vs. inflation. CPI data in the US showed a more moderate increase in core inflation, while consumer confidence in the US came in slightly better than expected and long-term inflation expectations eased.

In terms of our own market views, we re-emphasized our Dollar bearish bias in the FX Monthly but also highlighted that limited further upside in European rates together with slightly more volatile risk sentiment could temporarily hurt our long EUR/US $ exposure. Our commodities strategy team turned more neutral in the near term for oil, and as a result, we closed our long recommendation in Canadian equities.

Week Ahead

The week ahead is reasonably light on data. The European PMIs and the German IFO will be the key releases to watch. So far, these forward-looking growth indicators have remained steady at remarkably high levels, and it will be interesting to watch whether it extends for another month.

As a result of our more neutral stance on oil, we are watching our RUB trade closely. If the CBR remains hawkish then there is room for RUB to continue to perform even if oil prices correct lower in the near term. Therefore, watching next week's investment data is key for our view on the economy and the central bank's next move.

Next week's central bank meeting in Turkey is unlikely to provide a negative backdrop for our long EURTRY recommendation as we do not expect CBRT to raise reserve requirements again.

Monday 18 April

RBA Board Meeting Minutes.

Hungary Monetary Policy Meeting: We expect the National Bank of Hungary to keep rates unchanged at 6%.

Also of interest: Poland wages, US homebuilders' survey, Singapore trade balance. Fed speeches by Bullard, Fischer & Lockhart.

Tuesday 19 April

Eurozone Flash PMIs (Apr): We expect the manufacturing PMI to print at 57.2, very close to last month's print (of 57.5). Similarly for the services PMI we expect 57, which would be slightly below last month's 57.2 print.

Russia Investment Statistics (Mar): The strength of the rebound in domestic demand will be important to watch in order to assess the odds for further monetary tightening in the near term in Russia. Our long RUB basket recommendation is predicated on a hawkish CBR stance.

US Housing Starts (Mar): We expect a 5% increase in starts vs consensus forecasts of 9.6%.

Also of interest: Canada CPI (Mar), Japan trade balance (Mar), Hungary Wages (Feb), Poland IP (Mar).

Wednesday 20 April

Thailand Central Bank Meeting: We expect a 25bp hike of the policy rate to 2.75%, on the back of rising inflationary pressures.

Taiwan Export Orders (Mar): The March 11 earthquake in Japan is likely to distort export numbers across the region.

Sweden MPC Meeting: We expect the Riksbank to hike rates by 25bps to 1.75%. This is in line with consensus expectations.

UK MPC Meeting Minutes: It would be a surprise if any committee member had switched votes between March and April.

US Existing Home Sales (Mar): We forecast a decline of 6% mom vs a 2.5%mom increase that consensus expects.

Also of interest: South Africa Retail Sales, Mexico INPC inflation.

Thursday 21 April

Germany IFO (Apr): We will be watching whether the IFO continues to point to substantial strength in the German manufacturing sector. The components will also be of interest in terms of assessing the course for business expectations and current trends in the retail and wholesale sectors.

Turkey Monetary Policy Meeting: We expect the Bank to leave rates unchanged at 6.25%. We do not expect the bank to hike reserve requirements (RRR).

Japanese Portfolio Flow data for the week ending April 15. The last data set showed large Japanese selling of foreign debt. In comparison to previous years, we think it is related to fiscal year end. If the trend continues, it may signal repatriation of foreign assets in response to last month's earthquake.

US Philly Fed (Apr): We expect the Philly Fed indicator to decline to 33 from 43.4, consensus expects a decline to 36 only.

Also of interest: US initial claims, Canada retail sales.

Sources:

Succinct Summation of Week’s Events (4.15.11)

Global Key Economic Event And Bond Issuance Summary For The Upcoming Week