Major Economic Events for Forex Trading
Economic indicators are closely watched in the investment world. These things have an immediate and a volatile effect on the Forex market or other markets. In trading markets, there are many indicators are available and they are very important for trading.
GDP – Gross Domestic Product
The most important of all economic indicators is the Gross Domestic Product report. Moreover, it is the biggest measure of the overall state of the economy. Usually, this report is released at 8:30 am EST on the last day of each quarter and it reflects the previous quarter’s activity. But, what actually GDP means? The GDP is the aggregate monetary value of all the goods and services produced by the entire economy during the quarter being measured (Does not include international activity). In fact, the growth rate of GDP is the important number to look for.
CPI – Consumer Price Index
The CPI report is the most widely used measure of inflation. This is a valuable indicator, and the report is released at 8:30 am EST around the 15th of each month and it reflects the previous month’s data.
What does CPI measure? It measures the change in the cost of a bundle of consumer goods and services from month to month.
PPI -The Producer Price Index
The PPI is one of the two most important measures of inflation (along with CPI). The PPI report is released at 8:30 am EST during the second full week of each month and it reflects the previous month’s data.
How does it work? The producer price index measures the price of goods at the wholesale level. There is a difference between Consumer Price Index and the Producer Price Index. However, the PPI measures how much producers are receiving for the goods while CPI measures the cost paid by consumers for goods.
Retail Sales Index
The Retail Sales Index measures goods sold within the retail industry from large chains to smaller local stores. Retail Sales Index takes a sampling of a set of retail stores across the country. It is released at 8:30 am EST around the 12th of the month and it reflects data from the previous month. And the Retail Sales Index report is often revised fairly significantly after the final numbers come out.
Durable Goods Orders
The durable goods orders report gives a measurement of how much people are spending on long-term purchases. These orders are defined as products that are expected to last more than years. The Durable Goods Order report is released at 8:30 am EST around the 26th of each month and is believed to provide some insight into the future of the manufacturing industry.
The Beige Book report is part of the FOMC’s preparations for its meetings and is published 8 times per year. This report is released two Wednesdays before each Federal Open Market Committee meeting at 2:15 pm EST. In general, the Beige Book report summarizes economic conditions in each of the Fed’s regions. This report is usually seen as an indicator of how the Fed might act at its upcoming meeting.
Interest rates are the main driver in Forex markets. Economic indicators are closely watched by the Federal Open Market Committee in order to gauge the overall health of the economy. Interest rates are the main driver of Forex price action, and economic indicators are also very important.
Economic calendars are very important for traders or investors. You can set up your own affective strategy by analyzing these indicators very well. These reports can help you to make a good trading plan also.