Investors use the economic calendar to track market trends, such as economic indicators and monetary policy decisions. Usually, an economic calendar is displayed as a chart showing a particular year's days, weeks, and months. Every day, several market-moving events are listed in chronological order, giving investors time to research and anticipating specific interest releases.
What Is Economical Calendar?
The economic calendar makes you aware of the important dates of any event or release that may affect the economic situation of the market. The financial sectors are a news-driven market interest vehicle. Thus, the arrival of significant news or financial events will drive price growth in the market.
For traders, this term is like their best friend. They only spend one to two minutes a day, but for them that one minute is very important and they start their day by going through the economic calendar.
Understanding the Economic Calendar
Economic calendars usually focus on the scheduled releases of economic reports for a given country. Examples of events that are listed on an economic calendar include weekly jobless claims, reports of new home starts, scheduled changes in the interest rate or interest rate signaling, regular reports from the Federal Reserve or other central banks, economic sentiment surveys from specific markets, and hundreds of other types of events.
What are some of the most important events on an economic calendar ?
Each of the announcements and news events below are big drivers of volatility, especially in the forex markets. None move the market more than Non-farm payroll data (NFP), which is released on the first Friday of every month and reports on the health of the United States jobs market. Other economic news with significant impact includes central bank interest rate decisions and consumer price index (CPI).
Here are the most impactful financial events that move the markets on a monthly basis:
- US Non-farm payrolls (NFP)
- Employment Indicators (labour force, payroll, and unemployment data estimate)
- Central Bank rate decisions (central banks minutes/statement)
- Consumer Price Index (CPI) or Inflation
- Retail Sales
- EIA Crude OIL Inventory
- OPEC Meetings
- Produce Price Index (PPI)
- Gross Domestic Product (GDP)
- New Home Sales
- Durable Goods Orders
- Existing Home Sales
- ISM Data
- Trade Balance
HOW TO READ THE FOREX ECONOMIC CALENDAR
Knowing how to read the forex economic calendar properly is important to maximize your analysis and trading strategy prior to and following the most important releases. Checking the calendar every morning will allow you to familiarize yourself with the upcoming events that matter. Take stock of the economists' forecasts associated to events (those that carry them) as that can help set the market's expectations as well as the impact the outcome has when the 'actual' posts relative to forecasts.
In default mode, the calendar will show you every piece of economic news coming out of the major economies. For many, that will be information overload, so you may want to customize the look.
Recurring news events tend to make the most compelling indicators because they have predictable effects on trading sentiment and volume. Examples include scheduled publication dates for widely regarded market statistics or surveys, and anticipated events such as federal decisions on interest rates, trade balances, and inflation.
Although other international events can affect market volatility, the economic impact and time line of solitary events is less certain and can, therefore, be harder to trade.
There are many free versions of economic calendars available online, but designated trading platforms tend to offer account holders access to a more agile and all-encompassing calendar. Before you choose an economic calendar at random, remember that your calendar is only as useful as the events are relevant to your chosen market(s).
Because forex trading is international in nature, it's helpful to have a calendar that allows you to set custom qualification criteria and filter results by country and currency used.
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