The Economic Calendar helps you follow the influences which induce price changes in investment tools. All the currencies transacted in Forex parity get affected by the economic calendar data which concerns all currencies. Because of its nature, data about reserve currencies are followed more as they particularly affect various currencies. Hence, fundamental analysts pay more attention to the economic calendar data.
Economic data which is positioned under normal situations have positive impacts on the present process since in the real sector if there is trust in the economy, the investments begin to rise. That’s why increasing investments boost money demands and as a result, the domestic monetary unit responds with an increase in this demand. This is how the economy generally works. Except for some extraordinary situations, getting positive data for domestic monetary units forces it to increase its value against the currencies of other countries.
Right after announcing significant data like non-farm payroll data, it is normal to see serious vaulting in the market. The critical point to be aware of here is to know the movements which will occur in these fluctuations may go into the opposite directions first. That’s why small investors shouldn’t have open positions in these heavy and complicated times.
Economic data affects prices according to their value. The data with high value may cause significant fluctuations, while the data of low importance may not be taken into consideration by the price or might be neglected. The effects of economic data will be better understood in time.
Some data in the Economic Calendar according to their severity;
NON-FARM PAYROLLS CHANGE (NFP)
As the name implies, the most significant data that includes a report on the employment status of all employees outside the agricultural sector is the Non-Farm Payrolls Change. USD is considered to be an important foundation with the power to shape the direction. It is accepted as a very serious indicator of the healthy development of the economy. The report attempts to estimate the number of paid employees in the United States. Agricultural workers, employees at home, and non-profit businesses are not included. The remaining part makes 80% of the income. Getting high data can create positive outcomes for USD.
Publishing Date: It is published on the first Friday of each month.
ADP NON-FARM PAYROLLS CHANGE
This data, published by the ADP two days before the official employment office, is considered a reliable estimate of the official non-farm payroll data. Consequently, it is significant data markets take into consideration. Getting positive data can show upward mobility on USD.
It is published on Wednesdays two days before Non-Farm Payrolls Data.
The weekly Employment Requests data are generated by assessing the unemployment insurance applications in the relevant week. Applications for unemployment insurance are perceived as a critical indicator of the change of unemployment and that’s why it is regarded as valuable data. Getting lower data than expected can create a positive effect on USD.
It is published every Thursday.
US UNEMPLOYMENT RATE (%)
The unemployment rate is one of the most consequential reflections of the country’s economic situation. The rate is determined by a survey performed among 60,000 households and 375,000 enterprises. The usual unemployment rate, expected to be in an economy, is usually between 4-5%. In parallel, when unemployment falls, it wouldn’t be incorrect to expect the USD to strengthen.
It is published on Fridays every month.
GROSS DOMESTIC PRODUCT (GDP)
GDP expresses the market value of all final goods and services produced in a certain period in a country. While the earnings of foreign companies operating in the USA are included, the earnings of US citizens abroad are deducted from this account. GDP gives information about whether a country’s economy is developing or stagnating. The positive development of GDP, which is a very valuable indicator, may cause the USD to gain value.
It is calculated with the monthly data and published quarterly about 5 weeks after the end of the month.
CORE RETAIL SALES (RETAIL SALES)
It calculates the monthly differences between total retail sales. The explanation is the data that reflects how consumer expenses are the most unpredictable. It is adjusted according to seasonal variables, holiday times, and trading days differences. The acceleration in retail sales can be considered as a positive development in the economy. That’s why positive increases may cause the USD to gain value.
It is published at the end of the first half of every month.
Industrial production is a kind of chain-weighted measure in which the total production amount within the scope of industry, mines, and infrastructure services are measured in a country, and how much of the resources available to the production are used. One-third of the country’s economy forms the Manufacturing Sector. The capacity ratio gives an idea about how much of the capacity of the factories is used. The higher rates than expected can foreshadow for the increase of USD.
It is published in the middle of every month.
The housing inception report indicates the number of new buildings or buildings that have already started being constructed. Building constructions and dwellings, whose foundations have been started to be newly built, are defined as housing inceptions. Housing inception data is very sensitive to shifts in interest rates and is the first indicator of a change in interest rates. When housing inceptions or permits have a significant response to changing interest rates, they can signal that interest rates are approaching the peak or the bottom. Upgoing value data may form increasing pressure on the USD.
It is published in the middle of the month.
MANUFACTURING IDEX (ISM)
The data, published by the Institute of Supply Management, provides information on the manufacturing industry activities. When created, the inventory of about 400 companies, production line status, orders, and deliveries are calculated. If the index value is above 50, it is assumed that the industry is alive. If it is under 50, it is assumed that the industry is stagnant. Announcing the value more than expected can cause positive movements in markets.
It is published on the first workday of every month.
Michigan Sensitivity, also known as consumer sensitivity, reflects consumers’ confidence in the US economy. It is the outcome of a telephone survey conducted by the University of Michigan with a community of at least 500 people. It contains two variables: sensitivity and expectations. The survey aims to understand the public’s financial status and future expectations. The high index will affect growth positively. Therefore, a rising value may be an indicator of the increase in USD.
The draft of the report is published approximately on the 15th of each month. The final version is published on the last Tuesday of every month.
CONSUMER PRICE INDEX (CPI)
CPI is the foremost indicator of inflation in the country. The CPI calculates the change in prices, depending on the economic environment conditions where a basket of certain goods and services used by consumers in the city is affected. The CPI is determined by the US Department of Labor according to price analysis in 85 provinces. Under normal economic circumstances, interest rates in the CPI lead to growth, which makes the dollar more valuable during the period.
It is published between the 15th and 25th of every month.
PRODUCER PRICE INDEX (PPI)
PPI (Producer Price Index) is described as a producer price index of manufactured goods and it measures the price change of all products in the production stage. Calculates inflation for producers without including services in the account. Typically, a sudden increase in PPI triggers a decline in the share and bond markets. At the same time, it can trigger the rise of the USD with an increase in the interest rate.
It is published monthly for the previous month.
PURCHASING MANAGER INDEX (PMI)
The National Association of Purchasing Manager (NAPM) or the new Institute of Supply Management publishes a composite index about the country’s manufacturing sector every month. More than 50 sectors are explored through production, supplier distribution times, new orders, accumulated orders, employment, inventory prices, import, and export orders data. Rising data may have positive effects on the USD.
It is published at the end of each month.
EMPLOYMENT COST INDEX
The Employment Cost Index shows the price change of employees in workplaces operating in all sectors of a country. In some way, it can be stated that the labor cost is the element that defines it. A value more than expected can start an upward movement for USD and a value less than expected can start a downward movement.
It is published at the end of each month.
FACTORY ORDERS – (DURABLE GOODS)
Orders for durable goods by local manufacturers immediately or for the future delivery indicate durable goods orders. The term “durable goods” is used for goods with a service life of 3 years or more. Durable goods order data is temporary data. However, it is used as an indicator of future economic activities. The increase in orders may lead to an increase in production. Subsequently, the high index may increase the USD value.
It is published monthly.