Events & News that Affect Forex Market recommend In this article we will cover such an important factor as news and their influence on the currency market. We will also get acquainted with the calendar of the main expected events relevant when analyzing the current market situation. Besides the news as an event there is also its result, and it can be positive, negative or neutral. The effect the news has on the market can vary depending on its match or divergence with the forecast. If the news contradicts the current market trend, its impact will last for several hours. If it supports the trend, the price is likely to accelerate with further rebound. The news indicators that should be taken into consideration when analyzing the market situation are listed below. GROSS NATIONAL PRODUCT Importance: 1; Released By: Bureau of Economic Analysis (BEA); Due: 20th-30th of the month; Frequency: quarterly report (monthly revised); Volatility: medium; Comment: this is one of the most relevant indicators as it gives the most comprehensive view of the economic activity. GROSS DOMESTIC PRODUCT Importance: 1; Released By: Bureau of Economic Analysis (BEA), U.S. Department of Commerce; Due: 20th-30th of the month; Frequency: quarterly report (monthly revised); Volatility: medium; Comment: this is one of the most relevant indicators as it gives the most comprehensive view of the economic activity. TRADE BALANCE Importance: 1; Released By: Bureau of Economic Analysis (BEA), U.S. Department of Commerce; Due: 15th-17th of the month; Frequency: monthly; Volatility: moderate. EMPLOYMENT & UNEMPLOYMENT Importance: 1; Released By: The Bureau of Labor Statistics (BLS), the United States Department of Labor; Due: 1st-7th working day of the month; Frequency: monthly; Volatility: medium; Comment: predictions of many other indicators can be based on this one. INDUSTRIAL PRODUCTION AND CAPACITY UTILISATION Importance: 2; Released By: Board of Governors of the Federal Reserve System; Due: 14th-17th of the month; Frequency: monthly; Volatility: low; Comment: it usually has little impact on currency rates and depends on the current economic situation. RETAIL SALES Importance: 2; Released By: Bureau of Economic Analysis (BEA), U.S. Department of Commerce; Due: 9th-16th working day of the month; Frequency: monthly; Volatility: medium; Market response: the impact depends on the current economic situation; Comment: it reflects inflation rate. PRODUCER PRICE INDEX Importance: 2; Released By: The Bureau of Labor Statistics (BLS), the United States Department of Labor; Due: 9th-16th working day of the month; Frequency: monthly; Volatility: medium; Market response: the impact depends on the current economic situation; Comment: when being released simultaneously with CPI the importance of PPI raises to 1. This indicator reflects inflation rate. CONSUMER PRICE INDEX (CPI) Importance: 2; Released By: Bureau of Labor Statistics (BLS), the United States Department of Labor; Due: 15th-21st of the month; Frequency: monthly; Volatility: moderate; Comment: when being released simultaneously with PPI the importance of CPI raises to 1. This indicator reflects inflation rate. PERSONAL INCOME AND CONSUMPTION EXPENDITURES Importance: 2; Released By: Bureau of Economic Analysis (BEA), U.S. Department of Commerce; Due: 22nd-31st of the month; Frequency: monthly; Volatility: moderate; Comment: the indicator is extremely important as it defines more than half GDP. CAR SALES Importance: 3; Released By: car producers; Due: first and third day after the period ends; Frequency: monthly; Volatility: medium; Comment: this is one of the first indicators in the month. It is a leading indicator and it predicts the change of economic growth in the future. NATIONAL ASSOCIATION OF PURCHASING MANAGER”S INDEX (NAMP) Importance: 3; Released By: National Association of Purchasing Management; Due: first working day of the month; Frequency: monthly; Volatility: medium; Comment: this indicator gives a comprehensive estimate of the manufacturing sector of economy. DURABLE GOODS ORDERS Importance: 3; Released By: Bureau of Labor Statistics (BLS), the United States Department of Labor; Due: 19th-27th of the month; Frequency: monthly; Volatility: very high; Market response: low. NEW HOME SALES Importance: 3; Released By: Bureau of Labor Statistics (BLS), the United States Department of Labor; Due: 28th of the current month-4th of the following month; Frequency: monthly; Volatility: moderate; Comment: it is a leading indicator. Its volatility increases in winter. CONSTRUCTION SPENDING Importance: 3; Released By: Bureau of Labor Statistics (BLS), the United States Department of Labor; Due: first working day of the month; Frequency: monthly; Volatility: high; Comment: revised data may differ significantly. FACTORY ORDERS AND MANUFACTURING INVENTORIES Importance: 4; Released By: Bureau of Labor Statistics (BLS), the United States Department of Labor; Due: last days of the month; Frequency: monthly; Volatility: very high; Market response: low. Numbers 1-4 characterize an indicator’s importance on the market. There are two cycles of fundamental indicators: - Short cycle: lasts for less than 24 hours and, as a rule, follows unexpected news; - Long cycle: lasts from several weeks to several years and is related to the general national and global economic climate. All news on the market is released by the world’s leading information agencies as Reuters, Bloomberg, Financial Times, CNN and CNBC. All published information is available online. On the agencies’ websites you can find the schedule of fundamental news due within 1-2 week; it is also called an economic calendar. This allows traders to forecast market fluctuations based on the data due and respond them.
Posted on: Fri, 25 Oct 2013 04:13:25 +0000
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