Economic indicators are scheduled economic data releases, declarations and announcements by leading factors in the financial arena. There are many indicators, and each of them differs from the other in their place of origin, target audience and effect on the various financial markets. For convenience purposes we separated the indicators by region – starting with the US indicators, followed by the European indicators and to the Asian indicators.
What are Economic Indicators?
The article will take a look at the various types of economic indicators, the importance of their use during trading as well as where to find the relevant indicators per country.
There are a number of economic indicators that offer statistical information about a countries economic activity. Used mostly as a ‘pre-view’ of sorts to establish performance, patterns and prediction on future performance within an economy, such as a business cycle. The article will take a look at the various types of economic indicators, the importance of their use during trading as well as where to find the relevant indicators per country.
There are a number of economic indicators that offer statistical information about a countries economic activity. Used mostly as a ‘pre-view’ of sorts to establish performance, patterns and prediction on future performance within an economy, such as a business cycle.
View our economic calendar to see upcoming economic events.
Types of Economic Indicators
The indicators’ frequencies vary from one indicator to the other; some are daily, others monthly and several are quarterly. Before the indicator occurs there are speculations made by leading financial figures, and traders base their moves on those speculations. An economic event has a double influence; first when announced, and second when compared to the speculations made before. A big difference between the speculation and the actual number can cause shifts in the market.
Examples of economic indicators include:
The Importance of an Economic Calendar
The key to the success for most traders is a frequently updated economic calendar. The calendar covers all important events and releases that affect the forex markets as well as the economy of a specific country. A great understanding of why markets do what they do, can be found on these calendars while traders are able to anticipate market moves based on previous, actual and forecasted numbers. With the release of key economic data such as NFP, GDP, etc figures present excellent trading opportunities.
How to use Economic Indicators?
In order to utilize the indicators to one’s advantage, a proper market analysis is required. Some traders prefer a more elementary research, while others choose a very thorough work and analyses. For all traders the indicators can be a very useful tool requiring close monitoring of the economic calendar. Once the trader knows that a certain event is due to take place, e.g. a country’s consumer supply and demand rate, he will prepare by making a speculation on the number that will be presented. Based on that speculation the trader will choose which instrument to trade and if he should open a buy or sell position. Should the trader be accurate the trade can result with substantial profits.
Speculation made on Economic Indicators should be done with a knowledge of relevant markets and financial occurrences, or general events that can affect the content of the indicator. Once knowing all the related factors, the speculation will be based on a firm ground of rational thinking.
Putting Economic Indicators to Work
Any trader, beginner or experienced, should familiarise himself with the economic calendar, and learn which indicators are relevant to his trades and how. Once this information is acquired traders will find out how their trades become more successful and their earnings can surpass their expectation.
European Economic Indicators
All of the recent and soon to be released economic indicators from the Euro zone. All the indicators explained so you can make informed decisions in your CFD & Forex trading.
Some of the popular indicators to follow are:
|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||Monthly & Quarterly|
|German Zew PMI||Indicates the sentiment of the German Banking sector and its feeling of the economic health of the Economy||Monthly|
|German IFO||Indicator of German Manufacturing||Monthly|
|ECB Rate Decision||Usually watch and listen to the comments made by the ECB Chief after the interest rate decision.||Quarterly|