Macroeconomic Indicators

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Gross Domestic Product (GDP)

Country: USA

Definition: GDP is the total market value of all goods and services produced within a country's borders in a particular period of time, including production by foreign companies working in the country's territory but excluding production by the country's companies abroad.

Description: GDP indicates the strength of an economy by showing the market value of goods and services produced within a country in a given year. The main components of GDP are consumption, investment, net exports, government spending and inventories with individual consumption generally making up two-thirds of GDP. The GDP Deflator index is often used in conjunction with GDP to measure shifts in the nominal cost of goods and services in a country.

Influence: An increase in GDP is a reflection of economic expansion. Gains in GDP for one country relative to other countries make the former attractive to investors. GPD generally serves to strengthen the national currency.

Market Importance: 3

Released: Released quarterly, on the last working day of the quarter (in January, April, July, October). A month later revised data are released, two months later the real GDP for the quarter is reported. It is released at 8:30 AM ET.

Source: The Census Bureau of the Department of Commerce.
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3 Month LIBOR Range

Country: Switzerland

Definition: The 3-month range of the London Interbank Offered Rate.

Description: The Swiss National Bank decided to set and maintain a wide range of 1.00% for a 3-month LIBOR interest rate on the Swiss Franc (CHF) to control the level of short-term interest rates. LIBOR is the London Interbank Offered Rate, an interest rate at which major banks distribute loans in the London interbank money market. LIBOR rates are set for different periods and on different instruments. LIBOR is fixed daily at 11:00 London time, and is calculated as the average of the last ten quotes offered by sellers).

Influence: High rates decrease the consumer lending growth rate and trigger an increase in savings, causing a slowdown in economic growth. The rise in rates usually leads to an increase of capital flow into the country and boosts the national currency in the medium term. However, if the increase in rates is not accompanied by rapid economic growth, this may lead to economic stagnation and a negative impact on the currency market in the long term.

Market Importance: 3

Released: Released quarterly, usually on the third Thursday of the month (March, June, September, December).

Source: The Swiss National Bank.
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Durable Goods Orders

Country: USA

Definition: An index measuring the volume of orders of durable goods.

Description: Durable Goods (understood as goods whose intended lifespan is three years or more) is considered a leading indicator of manufacturing activity and the market often moves on this report despite its tendency for high levels of volatility. An increase in orders represents future business for manufacturers which builds investors' anticipation of future earnings which in turn often moves the market. Approximately 3/5 of all durable goods orders are for cars and trucks with the remaining part mostly devoted to building materials, furniture, and household items.

Influence: The Durable Goods report is considered a leading indicator of manufacturing activity and is often able to detect economic shifts up to six months in advance. A decline in orders may signal an economic slowdown whereas an increase could signal expansion.

Market Importance: 2

Released: Released monthly during the final week of the month.

Source: The Census Bureau of the Department of Commerce.
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Leading Indicators Index

Country: USA

Definition: An average weighted index used to predict the direction of the movement of the economy.

Description: The Leading Indicators Index in the United States provides a summary of the economy, and is comprised of the following 10 economic components: 1) The average hours worked per week by production workers in manufacturing industries; 2) The average number of weekly new claims filed for unemployment insurance; 3) Manufacturers' new orders for consumer goods; 4) The relative speed at which vendors can deliver orders to industrial companies; 5) New orders received by manufacturers in non-defense capital goods; 6) The number of residential building permits issued; 7) The change in the stock market; 8) The M2 money supply (adjusted for inflation); 9) the yield curve, which is the spread or difference between long term and short term interest rates; and 10) The index of consumer expectations. The historical precedent suggests that if the leading indicators drop three months in a row, a recession is likely to follow. The indicators often signal a change in direction from growth to recession ten months out but a turn from recession back to growth only 1-2 months out. Between 1952-1998 the indicators predicted ten recessions of which seven actually occurred.

Influence: An increase in this index may boost the USD.

Market Importance: 1

Released: Released at the beginning of each month at 10:00 AM ET.

Source: The Conference Board, based in New York.
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Chicago PMI Index

Country: USA

Definition: An index measuring the strength of regional manufacturing.

Description: The Chicago PMI is a monthly measure of manufacturing conditions based on surveys of purchasing managers in the Chicago area. The report has a benchmark of 50 and is considered to reflect economic growth with a reading above 50 and contraction with a reading below 50.

Influence: Chicago PMI index readings above 50 are generally thought to show industrial growth.

Market Importance: 2

Released: Released on the last business day of every month at 10:00 ET by The Purchasing Managers Association of Chicago.

Source: The Purchasing Managers Association of Chicago.
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Philadelphia Fed Index

Country: USA

Definition: An index surveying manufacturers from Philadelphia (USA) on attitudes towards the current economic situation.

Description: The Philadelphia Fed Index reflects the sentiment towards the current economic situation and perspectives for the next six months of approximately 100 Philadelphia-area manufacturers. A reading below “0” may point towards an economic slowdown. The Philadelphia index comes out just before the ISM (Institute for Supply Management) index and is often looked at as a valuable predictor of ISM results.

Influence: An increase in this index may lead to a strengthening of the USD.

Market Importance: 1

Released: Released on the third Thursday of every month at 10:00 AM ET.

Source: The Federal Reserve Bank of Philadelphia.
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Consumer Confidence Index

Country: USA

Definition: A monthly report on consumer confidence.

Description: The Consumer Confidence Index survey has been carried out on a monthly basis since 1967 to detect the level of consumer confidence in the current economic environment. The index was arbitrarily set at 100 and is adjusted monthly on the basis of a survey of approximately 5,000 households. Participants are asked about the financial situation of their family in relation to the previous year, the expected financial situation of the family for the current year, their thoughts on whether the economic situation will improve, stay the same, or deteriorate in the coming year and planned purchases for the coming year. The index considers consumer opinion both on present conditions (2/5 of the index) and future expectations (the other 3/5). Traditionally the index has been used to forecast the future health of the economy and is considered a leading indicator of the business cycle.

Influence: An increase in the index reflects favorable conditions throughout the economy, with the USD strengthening as a result.

Market Importance: 1

Released: Released around the 20th of each month at 10:00 AM ET.

Source: The Conference Board, based in New York.
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University of Michigan Consumer Confidence Index

Country: USA

Definition: A measure of consumer confidence conducted by the University of Michigan.

Description: The University of Michigan Consumer Confidence Index is a monthly telephone survey of no fewer than five hundred people. The survey consists of two components, sentiment (40% of the index) and expectations (60%). Participants are asked about current and anticipated future economic conditions and prospects for their own financial situation.

Influence: An increase in the index is positive for economic growth, whereas a decrease indicates possible deceleration in growth. The USD rate may advance on a positive reading.

Market Importance: 2

Released: Released twice a month: a preliminary report is released around the 15th of each month, the final one is released two weeks later at 09:45 AM ET.

Source: The University of Michigan.
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CPI: Consumer Price Index

Country: USA

Definition: A measure of change in the cost of consumer goods and services.

Description: The Consumer Price Index is the main indicator of inflation in a country. The index tracks changes in the market price of goods and services by measuring price changes for a certain constant “basket” of goods from one period to the next in the same geographic area. The basket includes food, clothes, education expenses, utilities, etc. and is considered representative of those typically consumed in a given region or country. In addition to being a key indicator of inflation, the CPI is also used to determine the official poverty threshold and the composition of government budgets. The CPI is determined by the US Department of Labor based on analysis of prices in eighty-five American cities. The index does not take into account discounts or rapidly fluctuating prices. In normal economic conditions, an increase in the CPI leads to an growth in interest rates which in turn boosts the dollar, as the higher rates make investment more attractive.

Influence: An increase may trigger interest rate hikes.

Market Importance: 3

Released: Released between the 15th -21th of each month (on a Tuesday or Thursday), soon after the release of the PPI, at 08:30 AM ET.

Source: Bureau of Labor statistics, U. S. Department of Labor.
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Industrial Production

Country: USA

Definition: A measure of the physical output of the nation's factories, mines and utilities put out by the Federal Reserve Board.

Description: The Industrial Production Index is a strong indicator of the strength of American industries. By charting changes in the production volume in the industrial sector, the index provides an overview of industry health in the country and provides investors with a sense of which industries are growing or contracting. With industrial production making up almost 40% of total economic activity, investors watch monthly changes in these figures very closely. Increased industrial output leads to an increase in the value of money, which boosts the stock market and brings the bond market down.

Influence: The Industrial Production index is one of the most straightforward indexes to analyze. As a result, sharp changes in the index are felt well in advance by the markets and are only accompanied by gradual price changes.

Market Importance: 2

Released: Released in the middle of each month at 09:15 ET.

Source: The Federal Reserve.
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Producer Price Index (PPI)

Country: USA

Definition: The Producer Price Index is a measure of changes in wholesale prices of goods and services.

Description: The PPI reflects changes in the prices domestic producers receive for their output. It takes into account changes in prices at all stages of production (raw, intermediate, and finished). Imports are not specifically included in the index, but the cost of imported raw materials indirectly affects the PPI. The index includes the manufacturing and agricultural sectors but does not include the service sector. The PPI is calculated on the basis of current prices of approximately 3,450 goods, compared with prices in 1982, the basis year. Usually a PPI increase foretells a rise in the CPI. The breakdown of goods analyzed is as follows: consumer goods 40%; food 26%; industrial equipment 25%; energy 9%. Before 1978, this indicator was known as the Wholesale Price index.

Influence: Increases in the PPI trigger cost-push inflation, a far more insidious form of inflation than demand inflation. A rise in the PPI may lead to higher interest rates.

Market Importance: 2

Released: Released in the middle of each month for the prior month.

Source: Bureau of Labor Statistics, U. S. Department of Labor.
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Capacity Utilization

Country: USA

Definition: A measure of the extent to which a nation uses its installed productive capacity.

Description: Capacity Utilization refers to the relationship between actual output and potential output in a given industry. If market demand grows, utilization will increase accordingly. The optimal value for this indicator is 81.5. A lower value signals economic slowdown, whereas a value higher than 85 leads to inflation risk through bottlenecks and limited delivery of goods.

Influence: When the CU approaches 85, it is treated as a signal of possible inflation.

Market Importance: 1

Released: Released in the middle of each month, at 09:15 ET, simultaneously with Industrial Production.

Source: The Federal Reserve System.
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Personal Income

Country: USA

Definition: Personal Income measures pre-tax household income from all sources.

Description: The measure of income from all sources is estimated using payrolls and earnings data from employment reports. It includes income from rent, interests, dividends government subsidy payments, etc. Personal income indicates future consumer demand and is reported together with Personal Spending.

Influence: An increase in Personal Income may trigger more consumption which may in turn boost the USD.

Market Importance: 1

Released: Released after the 20th of each month at 08:30 AM ET.

Source: Bureau of Economic Analysis of the Department of Commerce.
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Personal Consumption / Expenditures (Personal Spending)

Country: USA

Definition: A measure of spending on domestic and imported durable goods , non-durable goods, and services.

Description: The PCE is comprised of three categories: durable , non-durables, and services. A decrease in consumer spending will lead to a weakening of the economy at large. In a heavily consumption and service-based economy, consumer spending will figure more heavily into the overall economic picture.

Influence: A rise in consumer spending may lead to a strengthening of the USD.

Market Importance: 1

Released: Released after the 20th of each month at 08:30 ET.

Source: Bureau of Economic Analysis of the Department of Commerce.
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IFO Survey

Country: Germany

Definition: A leading indicator of economic activity in Germany. .

Description: The IFO Business Climate Index is based on survey responses about the current and anticipated future business climate in Germany from firms in various industries. The index is adjusted monthly from a basis of 100.

Influence: An increase may lead to a strengthening of the euro.

Market Importance: 2

Released: Released monthly around the 25th to 27th at 10:30 AM ET.

Source: IFO Institute for Economic Research at the University of Munich.
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ZEW Survey

Country: Germany

Definition: A monthly survey conducted by the German research institute ZEW.

Description: The ZEW is an investor confidence survey based on the responses of 350 analysts and investors in Germany. The attitudes of the participants are queried concerning the current and anticipated future economic climate. The reading is based on the proportion of optimistic or pessimistic responses. If a majority of participants are optimistic, the reading will be above zero. If the response is more pessimistic, the reading will be below zero.

Influence: The Survey is used to evaluate prospects for the German economy. A positive reading could lead to a strengthening of the euro.

Market Importance: 2

Released: Released monthly on every third (or fourth) Tuesday at 11:00 ET.

Source: German Research Institute ZEW.
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Tankan Survey

Country: Japan

Definition: A survey on economic conditions in Japan.

Description: The Tankan Report is a survey of between eight and ten thousand Japanese businessmen on current trends and conditions in business on the whole, as well as their respective industries. Additionally, participants are queried about their expected business activities for the next quarter and year. The companies polled represent a sample of businesses of various sizes and include several of the largest Japanese firms, as well as a number of medium-sized and small businesses.

Influence: A positive reading may lead to a strengthening of the JPY.

Market Importance: 3

Released: Released quarterly, at the beginning of April, July, October and mid-December.

Source: The Bank of Japan.
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Initial Claims (Jobless Claims)

Country: USA

Definition: A weekly report detailing how many people filed for unemployment benefits during the prior week.

Description: The Initial Jobless Claims Report is a low impact indicator illuminating the employment situation in the country. An increase in jobless claims is a sign of a weakening economy, whereas a decrease signals economic expansion and improvement in the job market. Due to the high volatility of the weekly report, many investors prefer use the four-week moving average.

Influence: A decrease in initial jobless claims indicates shows growth in the economy which may boost the USD.

Market Importance: 1

Released: Released weekly every Thursday at 8:30 AM ET.

Source: U. S. Department of Labor.
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Current Account Balance

Country: USA

Definition: An indicator measuring the flow of goods, services, income and transfer payments into and out of one country.

Description: The Current Account Balance is a measure of a country's foreign trade. It is the sum of the balance of trade (exports minus imports of goods and services), net factor income (dividends, interest) and net transfer payments (such as foreign aid).

Influence: A current accounts surplus is correlated with a strengthening of the national currency.

Market Importance: 3

Released: Released quarterly in the middle of the publication month at 10:00 AM ET.

Source: Federal Reserve (FRS).
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Productivity

Country: USA

Definition: Productivity shows the efficiency of the workforce in producing goods and services.

Description: The Index shows changes in production volume relative to labor costs and can be an early indicator of inflation. Rising production with equal or lower labor costs is an indication of increasing productivity, while increasing labor costs without a corresponding increase in production mean a reduction in productivity. The index is followed closely by investors but may on occasion lead to a false impression of economic health. Layoffs may lead to increased productivity as measured per worker. Strikes can also influence productivity figures.

Influence An increase in the value of this index is generally a positive sign for the economy.

Market Importance: 2

Released: Released quarterly, twice for the previous quarter before the 10th of every month (initial and final reading), on the 2nd Tuesday of the 2nd month of each quarter, for the previous quarter at 08:30 AM ET.

Source: Bureau of Labor Statistics, U. S. Department of Labor.
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Factory Orders

Country: USA

Definition: The Factory Orders Report measures the dollar volume of new orders, shipments, unfilled orders, and inventories reported by domestic manufacturers and is expressed both as a figure and as a percent change from the previous month.

Description: This indicator signals industrial demand for durable (understood as goods whose intended lifespan is three years or more) and non-durable goods. An increase in orders foretells increased production which has a positive effect on the currency rate. By the same token, a decrease in orders signals an impending decrease in production.

Influence: . An increase in factory orders is a positive factor for future growth of the economy.

Market Importance: 1

Released: Released monthly at 10:00 AM ET.

Source: The Census Bureau of the Department of Commerce.
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Repo Rate

Country: Great Britain

Definition: A short-term lending rate.

Description: The Repo Rate is the interest rate at which the BoE lends to banks and other financial institutions short-term (usually on an overnight basis). This interest rate is the main rate in Great Britain. Repo is short for “repurchase agreement”, a contract whereby the seller is obliged to repurchase a security from the buyer at a set price on a specific date in the future. BOE set the higher inflation threshold at 2%, thus, if consumer prices grow above 2% per year, an increase in interest rates can be expected.

Influence: High rates decrease the consumer lending growth rate and trigger an increase in savings, causing a slowdown in economic growth. The rise in rates usually leads to an increase of capital flow into the country and boosts the national currency in the medium term. However, if the increase in rates is not accompanied by rapid economic growth, this may lead to economic stagnation and a negative impact on the currency market in the long term.

Market Importance: 3

Released: Released monthly, usually on the first Thursday of the month at 11:00 GMT. BOE minutes are released 2 weeks after the rates are announced, usually on a Wednesday.

Source: The Bank of England.
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Non—Farm Payrolls

Country: USA

Definition: A report that gives an overview of the employment situation in the US.

Description: The Non-Farm Payroll figures represent the country's total number of workers outside the agricultural sector. The report is derived from a survey of approximately 400,000 businesses and 50,000 homes and is updated on a monthly basis. The data are adjusted to account for seasonal employment or changes in the formula. The Non-Farm Payroll Report along with the Unemployment Rate, Average Work Week, and Hourly Earnings form the definitive determination of the inflation rate and the possibility of changes in the interest rate.

Influence: Increases in this indicator indicate economic growth.

Market Importance: 3

Released: Released monthly, usually on the first Friday of the month at 08:30 AM ET.

Source: Bureau of Labor Statistics, U. S. Department of Labor.
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Retail Sales (RS)

Country: USA

Definition: A measure of changes in retail sales volume.

Description: Retail Sales are a measure of total receipts for retail stores. Monthly percentage changes reflect the change of such sales and are widely followed as an indicator of consumer spending. Retail sales comprise two thirds of GDP and are divided between durable goods (%40) and non-durable goods (60%) Changes in the prices of gas and food will lead to an increase in Retail sales though such increases are not connected with rising demand.

Influence: Market reaction on retail sales data may be quite strong as these data are difficult to forecast. Low sales may signal economic slowdown and a fall of the dollar.

Market Importance: 2

Released: Released monthly around the 13th at 08:30 AM ET.

Source: The Census Bureau of the Department of Commerce.
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Federal Funds Rate

Country: USA

Definition: The Federal Funds Rate (FFR) is an interest rate used in operations between banks who are members of the Federal Reserve System.

Description: The FFR is regulated by the Federal Open Market Committee (FOMC). Although the yield of financial instruments is determined by the market, rates are of great importance as they serve as a guide for market participants: the correlation between the FFR and bond yield is very high. Rate hikes usually stimulate growth in debt instrument yield, which encourages capital flow from the stock market into the debt market. *As of late, the growth dynamics of bond yield and the FFR have differed greatly.

Influence: High rates decrease the consumer lending growth rate and trigger an increase in savings, causing a slowdown in economic growth. The rise in rates usually leads to an increase of capital flow into the country and boosts the national currency in the medium term. However, if the increase in rates is not accompanied by rapid economic growth, this may lead to economic stagnation and a negative impact on the currency market in the long term.

Market Importance: 3

Released: Released eight times per year, about once every seven weeks, usually on Tuesdays at 14:15 ET.

Source: The Federal Reserve.
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Refinancing Rate

Country: Euro Zone

Definition: The Refinancing Rate is the smallest interest rate possible for requests to attract funds in ECB tender.

Description: The tender for investments is held every two weeks, which is necessary to maintain liquidity in the monetary system. The Refinancing Rate is the main European interest rate (12). The ECB set the higher inflation threshold at 2%, thus, if consumer prices grow above 2% per year, an increase in interest rates can be expected.

Influence: High rates decrease the consumer lending growth rate and trigger an increase in savings, causing a slowdown in economic growth. The rise in rates usually leads to an increase of capital flow into the country and boosts the national currency in the medium term. However, if the increase in rates is not accompanied by rapid economic growth, this may lead to economic stagnation and a negative impact on the currency market in the long term.

Market Importance: 3

Released: Released monthly, usually on the first Thursday of the month at 11:45 GMT. The ECB's president’s press briefing begins at 12:30 GMT.

Source: The European Central Bank.
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Trade Balance

Country: USA

Definition: Trade balance is the difference between export and import volumes of a country.

Description: The trade balance is calculated by subtracting aggregate imports from aggregate exports. In addition to looking at the sum of the trade balance, both imports and exports are analyzed independently for their respective effect on the economy. If a country's exports are greater than imports, it is said to have a “trade surplus”. When imports are greater than exports, a country is said to have a “trade deficit”. A large positive trade balance implies an inflow of foreign currency into the country which raises the local currency rate. In recent years, the United States has had a trade deficit. It should be noted that trade balance volatility may be significant for GDP forecasts, as import volume is subtracted from GDP whereas export volume is added to it.

Influence: Any decrease in the trade deficit strengthens the USD.

Market Importance: 3

Released: Released on the 3rd week of each month (usually on Tuesday or Thursday) at 08:30 AM ET.

Source: The Census Bureau of the Department of Commerce.
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Unemployment Rate

Country: USA

Definition: The unemployment rate measures the percentage of unemployed workers in relation to the total labor force.

Description: The Unemployment Rate is regarded as one of the most important indicators of the macroeconomic conditions in the country. It is calculated monthly by surveying a random sample of approximately 60,000 households and 375,000 businesses. Only those actively looking for work are included in the figures. The natural rate of unemployment is considered to be about 4-5% of the labor force. Wages increase faster during periods of low unemployment which is a cause of inflationary pressure.

Influence: When an interest rate hike is expected, a decrease in unemployment may boost the USD.

Market Importance: 2

Released: Released on the first Friday of every month at 08:30 AM ET.

Source: Bureau of Labor Statistics, U. S. Department of Labor.
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Target for the Overnight Rate

Country: Canada

Definition: The Target for the Overnight Rate is the average interest rate the BoC wants to see on the market for short-term deposits.

Description: The Target for the Overnight Rate is the main rate in Canada. To control the level of interest rates on the overnight market, the BoC sets an operational band that is 0.5 percentage points wide and has the Target for the Overnight Rate at the middle.

Influence: High rates decrease the consumer lending growth rate and trigger an increase in savings, causing a slowdown in economic growth. The rise in rates usually leads to an increase of capital flow into the country and boosts the national currency in the medium term. However, if the increase in rates is not accompanied by rapid economic growth, this may lead to economic stagnation and a negative impact on the currency market in the long term.

Market Importance: 3

Released: Released eight times per year in accordance with the schedule published by the Bank of Canada.

Source: The Bank of Canada.
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Beige Book

Country: USA

Definition: Economic Survey of the US Federal Reserve System.

Description: This report includes commentary on regional conditions in retail sales, consumption, manufacturing, labor market, real estate, banking business, finance, agriculture, energy and natural resources. The information is structured by region and economic sector, which allows for the evaluation of economic conditions on a regional level.
The report is used to assert existing economic tendencies. When there are speculations about possible rate changes on the market, attention is paid to the section on the state of wages and prices.

Influence: The Beige Book is used to evaluate the economic efficiency of US regions and also as an indicator of future Federal Open Market Committee (FOMC) monetary policy decisions.

Market Importance: 1

Released: Released eight times per year on Wednesdays at 2:15 PM ET, two weeks before every FOMC meeting.

Source: The Federal Reserve System.