What is Economic Calendar
Economic calendar is a calendar with a pre-scheduled list of economic events primarily includes statements by central banks, Internal Monetary Fund (IMF), regulatory bodies, government organisations and others. The calendar lists all the events and the time they happen. These events help traders to anticipate the upcoming changes that can influence the market performance in which they trade and also helps them to keep track of market moving events.
What are the important Market Events in Economic Calendar
The major economic events that causes market volatility and changes the trader sentiments are:
Interest Rate Changes
Every month the European Central Bank(ECB), Bank of England (BoE), US Federal Reserve, Bank of Japan have interest rate announcements. Interest rate rise or cuts have significant influence on Forex trading as well on indices and shares trading. It’s not just the raise or cut in the interest rates that matter but the commentary around the Interest Rate announcements by the Central Banks which describes where the economic of the country is heading towards would be quite useful for the traders.
Inflation Data, just like Interest rates is announced every month. Consumer Price Index(CPI) which is the cost of living is watched more closely by traders these days compared to previous years. Inflation Data also has a knock on effect on Central Bank’s Interest Rates Policy.
Unemployment Data – Nonfarm Payrolls(NFP)
State of employment in major economic zones influence the markets. The big one is the US – the monthly US Nonfarm Payrolls which is 1st friday of the month which states how many jobs are added or lost in the US economy in the previous month. There would be a quite lot of volatility expected based on this, especially across currencies and commodities.
Gross Domestic Product (GDP)
GDP data announced by all the major economies, includes data related to performance of the economy Quarter to Quarter and Year on Year growth numbers.
What are the Important EUROPEAN economic indicators
Euro Zone CPI
This indicator gives us an indication of consumer inflation in the EU and has a key effect on the economic policy released by the ECB. Data is released monthly and quarterly.
German Zew PMI
Indicates the sentiment of the German Banking sector and its feeling of the economic health of the Economy. This data is released monthly.
Indicator of German Manufacturing. Released on a monthly basis.
ECB Rate Decision
Usually watch and listen to the comments made by the ECB Chief after the rate decision.This is done on a quarterly basis.
What are the Important US economic indicators
Total number of paid US workers excluding government and farm employees. NFP data is released First Friday of every month.
Trade Balance or US Trade Deficit
Trade Balance Is the total difference between exports and imports. This data is released every month on the 10th at 8:30 EST.
CPI (Consumer Price Index)
CPI uses a basket of good to gauge inflation. Does not include food and energy. CPI data is released in the US every month on the 15th at 8:30 am EST.
Manufacturing ISM Report
A report of manufacturing within US factories and is released by the institute for supply management. Released every month on the first business day at 10:00 EST.
Michigan Consumer Confidence
Is a gauge that measures consumer confidence in the US economy. This survey is based a monthly survey of 5,000 US homes. Preliminary report released on the 15th day of every month. On the final Tuesday of the month, the final report is released.
GDP (Gross Domestic Product)
The total output of goods and services produced in the country. Quarterly and yearly numbers released. Every month the quarterly data is redone and released to the public at the end of the month.
New Orders For Durable Goods
Shows what durable goods orders are placed with manufacturers for both immediate and deliveries in the future. This indicator is seasonally adjusted.
PPI – Finished Goods
Measures inflation at the producer level. This does not include services. Around 15th every month.
US Unemployment Rate (%)
The number of those unemployed in the US, given as a percentage (ratio). First Thursday every month.
Residential Building Permits
These are new homes constructions that have been given permits to build. Both for single and multi units. Third Tuesday Every month.
Measures production in US factories, mines as well as utilities. Measures capacity, available resources and growth. Third Tuesday of every month.
The actual number of new home construction in the US. Around the 17th of every month.
Benefits of Using Economic Calendar in Day Trading
Holding a position and not looking at Economic Calendar when an announcement is about move the positions one way or another isn’t good. Especially when it’s a binary event, where the market moves significantly would impact your positions.
Pattern of Trading
The pattern of trading changes when announcements are made. The way market trades before the announcement would be a lot different to that after the announcement.