Economic Calendar

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What is an economic indicator?

Economic indicators are “economic statistics” announced by governments, economic-related central ministries and agencies, and central banks of each country.

Economic indicators are very important as fundamental analysis when we are trading.

An important tool for understanding economic indicators is the economic calendar.

Economic indicators serve as detonators that change trends, and exchange rates and stock prices can fluctuate significantly depending on policy decisions (for example, if they greatly exceed or fall short of prior forecasts, or if bad conditions continue for a long time). increase.

When trading forex and stocks, economic indicators must be constantly monitored to spot trend changes and stay profitable over the long term.

Economic Calendar

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11 Important Economic Indicators

The 11 economic indicators presented in this article are important economic indicators that change the trend significantly.

US employment statistics

The U.S. employment statistics, which collect data on the employment situation in the United States, mainly focus on the number of non-farm workers, the unemployment rate, and the average wage. When the economy is good, the number of employees will increase as companies expand their businesses.

On the other hand, if the economy is bad, the number of unemployed people will increase due to factory shutdowns and restructuring.

This statistic shows how many people a company is hiring, whether they are paying their wages, and whether they can still afford to hire them.

The U.S. employment statistics are particularly noteworthy for those involved in the currency exchange because the U.S. Federal Reserve Board (Fed) emphasizes the employment situation in making monetary policy decisions.

While the central bank’s role in many advanced economies is price stability, the Fed’s additional mandate is to maximize employment.

Therefore, if the employment statistics are good, it will lead to speculation that quantitative easing will be reduced and the policy interest rate will be raised, and if it worsens, it will lead to speculation that easing will be expanded or lowered.

The US employment statistics are released at 9:30 p.m. (10:30 p.m. US winter time) on the first Friday (and sometimes the second Friday) of each month. Please pay attention.

GDP (gross domestic product)

You may have heard the term GDP on TV or in the news. GDP stands for Gross Domestic Product, which is the total amount of value added produced within a country within a certain period of time. It is attracting the most attention as an economic indicator that shows the economic size of a country.

Another major feature of GDP is that figures for the same country at the same time are released multiple times. For the UK, US, and Eurozone, each quarter is announced three times: preliminary figures, revised figures (announced approximately one month after the announcement of preliminary figures), and final figures (announced approximately one month after the announcement of revised figures).

In Germany and France, both preliminary figures and confirmed figures (announced about 2 to 4 weeks after the announcement of preliminary figures) are announced twice each quarter. In Japan, the first preliminary report and the second preliminary report (announced about one month after the first preliminary report) will be announced twice.

The most notable of these is the preliminary figures released first.

However, if the revised and confirmed figures are significantly different from the previous forecast, there are cases where the exchange rate moves due to that, so it is necessary to watch carefully. GDP is released quarterly (3 months).

Retail Sales

Retail sales is an economic indicator that summarizes the sales of retailers such as department stores, supermarkets, and convenience stores.

In many countries, consumption tends to account for more than 60% of economic activity.

Consumption trends are essential in understanding economic trends, and retail sales are gaining more attention.

Also, keep in mind that US retail sales are released in the middle of each month.

Consumer Price Index (CPI)

The consumer price index is also abbreviated as CPI (Consumer Price Index).

It is data that indexed the overall price movement of goods and services purchased by general consumer households.

It is the most popular indicator for analyzing future trends in inflation, and attracts a lot of attention from investors when reading monetary policy.

Industrial Production

Industrial production is an economic indicator that summarizes the output of industrial goods such as computers, electrical appliances, and automobiles.

Mainly, you can grasp the business conditions of the service industry and the trends of personal consumption. For example, if the production of electrical appliances is increasing, we can analyze that personal consumption is growing.

In addition, if the output of office equipment increases, we can see that the company is doing well.

It is an economic indicator that is attracting attention because it can analyze the economic situation.

By looking at both retail sales and industrial production, we can better analyze near-term consumption trends.

Industrial production is released monthly in the Eurozone, as well as in Japan, the United States, the United Kingdom, Germany, and France.

Various Business Sentiment Indicators

A business sentiment index is an economic indicator that is an index of the results of interviews and questionnaire surveys of consumers, corporate purchasing managers, and analysts about the current economy and future economic trends.

If the business sentiment index is low, the economy is bad, and if it is high, the economy is good.

Among the business sentiment indicators announced by each country, the ones that are attracting the most attention are introduced in detail below.

ZEW Business Confidence Index

The ZEW Business Confidence Index is an index released monthly in Germany, the leader of the EU.

When the number is positive, it can be read that more analysts (more precisely, institutional investors and economists) are optimistic about the economy.

Conversely, when the number is negative, it means more analysts believe the economy is in recession.

IFO Business Confidence Index

The IFO Business Sentiment Index, like the ZEW Business Sentiment Index mentioned above, is an index released monthly in Germany.

The base value for 1991 is 100. If the value is less than 100, the economy is considered to be worse than 1991, and if it is 100 or more, it means that the economy is better than 1991.

US consumer confidence index

The US Consumer Confidence Index is an economic index based on a questionnaire survey published monthly by the US private research agency, The Conference Board.

The reference value in 1985 is set to 100, and if the value is less than 100, the economy is considered to be worse than 1985, and if it is 100 or more, it means that the economy is better than 1985.

University of Michigan Consumer Confidence Index

The University of Michigan Consumer Confidence Index is an economic indicator released monthly by the University of Michigan in the United States.

The reference value in 1966 is set to 100, and if the value is less than 100, the economy is considered to be worse than 1966, and if it is 100 or more, it means that the economy is better than 1966.

Bank of Japan Tankan

The official name of the Bank of Japan Tankan is the “Short-Term Economic Survey of Enterprises in Japan.”

Announced quarterly, the Bank of Japan interviews 10,000 private companies nationwide about their business sentiment and capital investment plans. It is a highly reliable economic indicator because it is directly run by the Bank of Japan.

Trade Balance

The trade balance is the balance obtained by subtracting the import value from the export value. If the value of exports exceeds the value of imports, there is a trade surplus; if the value of exports is less than the value of imports, there is a trade deficit.

Generally speaking, when there is a trade surplus, GDP rises, and when there is a trade deficit, GDP declines. As the trade balance is also used to calculate preliminary figures for GDP, it is an economic indicator that is attracting attention not only from investors but also from economists and market players.

Bank of Japan Monetary Policy Meeting

The Bank of Japan Monetary Policy Meeting is a meeting where the Bank of Japan discusses and decides on monetary policy and policy interest rates. It is held eight times a year, each for two days.

It mainly discusses and decides on financial market adjustment policies, monetary policy measures, and basic views on economic and financial conditions. Along with the Bank of Japan monetary policy meeting, attention will also be focused on the remarks of the Governor of the Bank of Japan after the press conference.

ECB Policy Board

The ECB (European Central Bank) Policy Board is a meeting that discusses and decides on monetary policy and policy interest rates in the Eurozone.

At its first monthly meeting, it decides monetary policy, such as the policy interest rate for the Eurozone.

At the second meeting, discussions will focus on non-monetary policy. In addition, since the minutes of the meeting will not be made public, attention will be focused on the ECB president’s remarks after the first press conference.

FOMC

The US Federal Open Market Committee (FOMC) is a meeting that discusses and decides on US monetary policy and policy interest rates.

It is equivalent to Japan’s Bank of Japan Monetary Policy Meeting and Europe’s ECB Policy Board.

It is an important event that determines the US policy interest rate, and investors around the world are paying attention. If there is a large divergence between the results and the forecast, the exchange rate, especially the dollar, may fluctuate significantly.