A lot of retail level traders use technical analysis as part of their trading strategies. Although that can be valuable data, market volatility – caused by economic calendar news – doesn’t necessarily care about head and shoulders or double top patterns. This is why if you are interested in trading you should definitely keep an eye on the economic calendar. Not all economic calendar events are created equally though. Here are 7 reoccurring events you should be aware of.
The 7 Economic Events you Should Definitely Follow
The US Non-Farm Payrolls is delivered at 8.15 EST on the first Friday of each month, holidays excluding – or when they are transferred from the preceding weekend. The NFP has the potential to create volatility globally, but it weighs more heavily on USD and JPY, especially if the data comes in under market expectations.
#2 Interest Rate Decisions
Here’s a little ECON 101 – interest rates are a great barometer for the health of an economy. That’s why markets always perk up their ears when a policy influencer mentions it – no interest rate decision usually pushes currencies down and interest rate hikes usually see currencies go up. Not all currencies mind you, just the ones that the policy affects.
#3 Chinese Manufacturing Data
If you prefer Asian markets then you will definitely need to watch Chinese Manufacturing Data closely – being the world’s biggest economy – even if you don’t trade the Asian session it might a good idea to be aware of it. China is one of the biggest exporters of the world and the world’s third largest importer. So it come as no surprise that any news related to China’s economy are going to move markets.
#4 Inflation Data
Much like interest rates consumer price and producer indices show the health of the economy – and more ECON 101 its simple supply and demand – in a healthy economy people buy consumer items and likewise production of said consumer items (and services) increases also. If these indices coming in under expectation, markets tend to scramble selling off the currency effected.
#5 Unemployment Rate Reports
This also is a good predictor of economic growth, stability and health. The better the economy, the more jobs there are and fewer the people that remain unemployed.
This mean Gross Domestic Production – this is a country’s economic Rosetta stone. Maybe that’s a bit of laboured metaphor – but what the GDP is, is the sum of all things produced in a country during the reporting period.
#7 Rate Announcements
Heads of central banks usually make statements leading up and following interest rate meetings. Markets follow these statements or speeches closely – as sometimes the Heads of these central banks reveal their intention – to either hike or keep rates during these statements.
Finally, there are few events that aren’t considered as significant as the ones mentioned above, but still provide valuable information:
- Business Confidence reports
- Core Retail Sales
- Surveys such as the ZEW and manufactures’ reports.