Economic calendar

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An economic calendar is used by investors to monitor moving market events, such as economic indicators and monetary policy decisions. Market displacement events, usually published or released in a report, are likely to have an impact on financial markets.

Economic calendars are usually shown as charts showing days, weeks and months in a given year. Each day lists some market events that move in chronological order, giving investors time to research and anticipate the release of special interests to them.

Video Economic calendar

Economic Indicator

Economic indicators are statistics that convey certain information about economic activity. Economic indicators allow investors to analyze the economic performance of a country, country or region, and make estimates about future performance.

For example, every quarter of the United States releases data on gross domestic product (GDP). This economic indicator allows investors to analyze the US economic performance over the previous three month period, and make comparisons over the previous year. How quickly the US economy grows can have a significant impact on market behavior.

Economic indicators are usually released by governments, international organizations and private research companies.

Maps Economic calendar

Monetary Policy

Monetary policy refers to the process by which the central bank and other monetary authorities control the money supply. Every country and region of the economy has a monetary authority that seeks to promote economic stability and growth within its jurisdiction. One way that monetary authorities do is to adjust (raise or lower) interest rates.

Central banks and monetary authorities meet several times each year to discuss current market conditions and determine whether monetary policy needs to be adjusted to achieve desired stability and growth outcomes. These events are outlined in the economic calendar.

For example, the European Central Bank (ECB) meets monthly to discuss monetary policy and determine the appropriate interest rate. The ECB Governing Council announces interest rate decisions after the meeting. Investors use the announcement to not only hear about ongoing policy developments, but to forecast the upcoming.

Monetary policy is formulated and released by central banks and monetary authorities only.

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Volatility Level

Economic calendars not only record daily events, but the degree of volatility attached to them. The level of volatility refers to the possibility that certain events will have an impact on the market. Economic calendars usually have a three-scale volatility meter. If an event has a one-level volatility level, it is not expected to significantly affect the market. Events with two volatility levels are expected to impact the market moderately, depending on other factors (eg other market events, political factors, news, etc.). Events with three volatility levels are expected to have a significant impact on the market. Highly volatile events are often most frequently monitored.

Below are some level one, level two and level three events:

Volatility Level One

• Recent Accounts
• Foreign Portfolio Investment
• Billing Auction

Volume Level Two

• Purchasing Managers' Index (PMI)
• Retail Sales
• Industrial Production

Three Level Volatility

• Monetary Policy Announcement
• Consumer Price Index (CPI)
• Employment data (job growth, unemployment rate)

Investors should also note that economically large and powerful countries typically have the greatest impact on the market. In this case, economic indicators released by smaller countries may not have the same impact as those released by larger countries. For example, the Greek Consumer Price Index (IHK) is unlikely to affect the market, and some calendars will have it listed as a first rate event. In contrast, CPI data from the United States or Euro Zone will have the greatest impact on the market. The countries and regions of the economy that tend to impact the most markets are the United States, Euro Zone, Japan and the UK.

Volatility levels are usually expressed in color (see below):

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Event Frequency

Events listed on the economic calendar are released at different intervals, depending on the nature of the event. Events typically occur weekly, monthly, and quarterly (ie every three months). The frequency of events also varies across countries and regions.

As a general rule, most events occur every month. Some events are released every three months and even fewer are released every week. Below are some examples.

Weekly Events

• Initial Jobless Claim (US)
• Business Outlook (Bank of Canada)
• Money Circulating M3 (European Central Bank)

Monthly Events

• Unemployment Rate
• Consumer Price Index (CPI)
• Building Permissions

Quarter Event

• Gross Domestic Product (GDP)
• Business Outlook (Bank of Canada)
• Money Circulating M3 (European Central Bank)

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References

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External links

• Financial Economic Calendar

Source of the article : Wikipedia