Economic calendar
The economic calendar is a list of different events that have positive or negative influences on different financial markets. The information presented in the economic calendar is compiled by analysts. The information includes both the figures of all the major economic indicators for the previous months and the analysts' forecast for the coming month.
The economic calendar enables traders to know exactly when an indicator (economy) is released and how much or less it can affect the market. Since all members of the financial market refer to the same numbers when executing their trading strategies, these numbers have the ability to influence the market, create trading volumes and change prices. Observing and paying attention to the indicators of the economic calendar enables traders to create trading strategies.
The economic calendar also prepares traders for any unforeseen price changes during these periods. For example, suppose the euro has found itself on a decline during the last 3 weeks, a result would be that traders go on a short position for the euro. Also assume that today is Monday and that the German unemployment rate will be published on Friday. If the published numbers are positive, traders will begin covering their short positions before Friday. This would then result in a brief market recovery for the euro. Here is the entry of the above example as it is described in an economic calendar: Unemployment rate - The unemployment rate is a measurement of the percentage of all workers who are unemployed but are actively looking for work and want to work in Germany. A high percentage indicates a weakness in the job market. A low percentage is a positive indicator for the job market in Germany and should be viewed as positive for the euro.
The economic indicators are published either by governments or academic institutions and are usually published on a weekly, monthly or quarterly basis. They represent reliable indicators of the general economic situation and are monitored by all different financial and investment sectors.
Important economic indicators
Some of the most important indicators are:
- Major Interest Rates
- Gross domestic product (GDP) - Gross Domestic Product (GDP)
- Work situation - Employment situation
- CPI - Consumer Price Index (CPI)
- Producer price index - Producer Price Index (PPI)
- PMI - Purchasing Manager's Index (PMI)
- Durables orders ( consumer ) - Durable Goods Orders
- Housing Permits - Housing Starts
- Industrial production - Industrial Production
- World Trade - International Trade
- Retail Sales - Retail Sales
The given economic indicators are usually offered in economic calendars for the most commonly traded currencies ( individual currencies ).