eToro – Forex Trading Forum

[djsheckie]

I've noticed that everyday there are at least a few announcements that seem to have effect on the market. So which announcements are important and what exactly are they about?

These are the main types of economic data along with when each report is released by the US government:

Gross Domestic Product (GDP)

In case you slept through Econ 101, or just never took it in the first place, the GDP represents the finished goods and services generated by a country during a specific period.

The calculation is split into four different categories: private consumption, government spending, business spending and total net exports. GDP is generally considered to be the most relaible indicator of an economy's health. Economic growth is generally represented by raises in the GDP. The US GDP data is released once a month in the third or fourth quarter of the month.

Inflation data

This shows whether or not prices have increased or decreased over a given period of time. Since there are millions of goods and services within any given economy, what's known as a "basket" of goods and services is used to measure changes in prices. The basket takes common items like milk, bread, gasoline, etc. and measures increases or decreases in their respective prices. Increases indicate inflation, whereas decreases show the opposite. Inflation data in the United States is released as monthly as the Consumer Price Index.

Interest Rates

These are set by the central banks of any given country and are used to control the monetary supply and direct fiscal policy. The Federal Open Market Committee (FOMC) determines the bank rate in the United States and they meet eight different times a year to determine whether to raise, lower or leave the bank rate the same.

Employment Stats

This one is pretty self explanatory- it's the employment statistics for any given country. The U.S. stats are called non-farm payrolls and are released on the first Friday of every month. Generally high employment is good as it signals a strong economy but in some cases could indicate inflation. So it's best to get as much context as you can when looking at the numbers.

Retail Sales

Retail sales reflect consumer spending over a given period. Retail sales are gathered by looking at the sales of selected stores in varying industries. Sales also provide an idea of the strength of the economy and increased spending shows a healthier economy. In the U.S., the retail sales figures are released sometime mid-month.

Durable Goods

These statistics measure the number of goods that are ordered, shipped and unfilled over a given period of time. Durable goods are those with a lifespan over three years and can include products like kitchen appliances, vehicles, etc. These numbers show the amount consumers have spent on longer term goods, and also provide an idea of how the factory sector is doing. In the US this data is released around the 26th each month.

Hope these definitions help you sort through all the data that's being released. :)

[djsheckie]

Just thought I'd update with the economic data that's expected this next week. Obviously there'll be nothing from the US on Monday since the markets are closed for Labor Day, but there's plenty of other data being released this week:

9/1/2008 05:00 JPN Vehicle Sales - (YoY)
9/1/2008 06:30 AUS RBA Commodity Index SDR
9/1/2008 07:55 EU German PMI Manufacturing
9/1/2008 08:30 UK M4 Money Supply - (YoY)
9/1/2008 08:30 UK M4 Sterling Lending (BP)
9/1/2008 23:50 JPN Monetary Base - (YoY)
9/2/2008 01:30 AUS Building Approvals - (YoY)
9/2/2008 04:30 AUS RBA CASH TARGET
9/2/2008 08:30 UK PMI Construction
9/2/2008 09:00 EU Euro-Zone PPI - (YoY)
9/2/2008 13:00 US RPX Composite 28dy YoY
9/2/2008 14:00 US ISM Manufacturing
9/2/2008 21:00 US ABC Consumer Confidence
9/2/2008 23:01 UK Nationwide Consumer Confidence
9/2/2008 23:30 AUS AiG Performance of Service Index
9/3/2008 01:30 AUS GDP - (YoY)
9/3/2008 03:00 NZ ANZ Commodity Price
9/3/2008 07:55 EU German PMI Services
9/3/2008 08:00 EU PMI Manufacturing
9/3/2008 08:30 UK PMI Services
9/3/2008 09:00 EU Euro-Zone Retail Sales - (YoY)
9/3/2008 09:30 UK BRC August Shop Price Index
9/3/2008 11:30 US Challenger Job Cuts YoY
9/3/2008 13:00 CA Bank of Canada Rate
9/3/2008 14:00 US Factory Orders
9/3/2008 18:00 US Fed's Beige Book
9/3/2008 23:50 JPN Foreign Buying Japan Bonds
9/4/2008 01:30 AUS Trade Balance
9/4/2008 10:00 EU Factory Orders - YoY
9/4/2008 11:00 UK BOE ANNOUNCES RATES
9/4/2008 11:45 EU ECB Announces Interest Rates
9/4/2008 12:15 US ADP Employment Change
9/4/2008 12:30 US Nonfarm Productivity
9/4/2008 12:30 US Initial Jobless Claims
9/4/2008 12:30 US Continuing Claims
9/4/2008 14:00 US ISM Non-Manf. Composite
9/4/2008 23:30 AUS AiG Perf of Construction Index
9/4/2008 23:50 JPN Capital Spending
9/5/2008 06:30 AUS Foreign Reserves
9/5/2008 10:00 EU German Industrial Prod. - YoY
9/5/2008 11:00 CA Unemployment Rate
9/5/2008 12:30 US Change in Nonfarm Payrolls
9/5/2008 14:00 CA Ivey Purchasing Managers Index

Just to clairfy some of the alphabet soup abbreviations in the listings above:

(ADP) - Automatic Data Processing - Yes, I also thought it would stand for something more exciting, but alas no.
(BOE) - Bank of England
(ECB) - European Central Bank
(ISM) - Institute for Supply Management
(PMI) - is short for Purchasing Manager's Index
(RBA) - Reserve Bank of Australia
(RPX) - Residential Price Index - represents the price per square foot in 25 different US metropolitan areas.
(YOY) - means year over year. Year over year compares data from the same time period during the previous year as a point of comparison.

Have a great weekend and a fun Labor Day! :)