Forex Macroeconomic Indicators

Economic statistic, such as: GDP, inflation rate and unemployment rate, that shows how well the economy is doing and how well the economy is going to do in the future is called economic indicator. These business indicators also allow analysis of current and predicted economic performances. They involved: earnings reports, various indices as well as economic summaries (housing starts, unemployment, stock market prices, retail sales, bankruptcies, industrial production, Gross Domestic Product, money supply changes, Consumer Price Index – a measure for inflation and so on.

Mainly the reports released by a private organization or/and the government, which presents the country’s economic performance. Remember that a great deal of factors and policies will affect a nation’s economic performance, that’s because of the economic reports, which are means by which a country’s economic health is directly measured.

The release of these reports are at scheduled times, which give us a information about the indication of whether a nation’s economy has improved or declined. In forex market, as in the stock market as well, any deviation from the norm can cause large price and volume movements. The effects of these reports are comparable to how earnings reports, SEC filings and other releases may affect securities.

You could recognize some of these economic reports. One of them is the unemployment numbers, that is well publicized. There are also others such as: receive little coverage, housing stats and much more. Well, one thing we know for sure and that is that indicator serves a particular purpose and can be useful.

Here are the most important economic indicators for any country:

1. Business sentiment surveys
2. Manufacturing sector surveys
3. Trade balance
4. Interest rate decision
5. Industrial production
6. Unemployment
7. Consumer confidence surveys
8. Inflation (consumer price or producer price)
9. Retail sales

The relative importance of these releases may change, depending on the current state of the economy. Let’s take for example the unemployment – it could me more important this month than interest rate as well as trade decisions. Also it is important to keep on top of what the market is focusing on at the moment. The government and academic sources release various indicators, which are followed by all sectors of the investment market and reliable measures of economic health. Some indicators are released weekly, but mostly they are on a monthly basis.

International trade and interest rates are the most important fundamental indicators. There are other indicators, that include: Durable Goods Orders, Consumer Price Index (CPI), Producer Price Index (PPI), retail sales and Purchasing Manager’s Index (PMI). In the United States, the major indicators are 28. They have strong effects on financial markets so FOREX traders should be aware of them when preparing strategies. Most economic indicators can be divided into leading and lagging indicators. Up-to-date information is available on many websites and many FOREX brokers supply this information as part of their trading service.

Leading indicators are used to predict changes in the economy, and they are also economic factors that change before the economy starts to follow a particular pattern or trend.

The leading indicators consist of the following economic indicators:

– change in sensitive materials price

- durable goods

- change in manufacturers’ unfilled

- new building permits issued

- vendor performance contracts and orders for plant and equipment

- new orders for consumer goods and materials

- average weekly claims for state unemployment

- average workweek of production workers in manufacturing

And finally, it is good to know that these economic indicators allow you to assess the overall strength and likely direction of the economy, which make the useful tools. If you are a trader it is really important to understand and monitor them, because they can have a significant impact on financial markets. On this page, we have mentioned some of these indicators, which are the most important and widely used, but there are mush more. And remember – these indicators have the most direct impact on the financial futures markets and no matter what markets you trade, you should know that they are important to watch for their economic implications.