FROM THE STREET ABOUT WALL STREET! DOES ANYONE REALLY HAVE AN ANSWER?
Economic calendars are used by forex traders to keep track of, and predict events that have the power to impact the rise or fall of stocks and shares in the market. Some of the things that are most commonly tracked in an economic calendar are monetary policy announcements by the Government of a country, or the Gross Domestic Product calculation. There are plenty others, a few of which are listed below:
Consumer Confidence reports: This basically takes note of the prevailing moods and attitudes of consumers towards goods, services and the economy in general, for e.g., the Consumer Confidence Index released in the USA. Reports like these serve to form a judgment of the spending power and purchasing judgment of the average consumer in the country where the report is being issued. This affects the market’s direction to a considerable extent since it is indicative of the economic health of the nation.
The Report on Durable Goods in the Country: This would consist of collected data regarding new orders from durable goods manufacturers in the country “Durable goods” usually mean: cars, consumer electronics etc. The higher the number of orders, the larger the indication of economic expansion. However, sample error can affect the figure considerably so it is advisable to the firms’ previous releases when evaluating the numbers.
Employer and Employment Situation Assessment: This one revolves around the important statistics of the economy, such as payrolls, hours worked, and hourly earnings. Another important number is the unemployment number which is used to assess the potholes in the economic health and expansion..
Gross Domestic Product Evaluation: As already stated in the introductory part, this is one of the most widely used indicators for the economic calendar. GDP, defined succinctly, is the average value of all the goods and services produced within the country, taken on a quarterly basis.
Industrial Production: This is the measure of the volume of monthly raw materials and final products of all the major and minor industrial sectors of the economy. Mainly geared at predicting inflationary trends, its significance has gone down in the recent times since the focal point of the Western economies has shifted away from industry to the service sector.
Money (currency) supply: Keeping tab of the amount of currency at work in the economy, helps with predicting the GDP, GNP and demand pull inflation. This is a minor, but really useful pointer on the economic calendar.
Mutual fund flows: This is stock regarding the total amount of money that goes in or out of all functional mutual funds in the country. Termed by a lot of economists as a “false positive” (since investment amounts are usually seen to scale the peak just prior to the market itself), it nevertheless assumes a position of importance on the indicator chart when the economy is in recession.
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