The countries' news and economic situation impact the financial markets and play a decisive role. Therefore, in the forex market, economic data and reports are very effective in the price trend of currency pairs and other assets. That is why traders pay attention to data and economic reports for more success. In the forex market, the exact time of economic data and reports release is shown in the economic calendar.
An economic calendar is a source of information about data, reports, and economic news affecting the countries' economies. There is information such as the exact time of reports release, the amount of data released, forecasting, and economic data analysis in the economic calendar. By reviewing the economic calendar, traders and investors learn the exact time of economic data release and reports & data results, as well as the countries' economic status, and based on these checks, they review the effect of economic news on the forex market and other financial markets. For example, by checking the economic calendar, the traders get helpful information from the exact time of the US central bank's interest rate release and the predictions and analyses about this data, which can play a pivotal role in the success of the trades.
Various websites and applications provide the forex market's economic calendar, and the following information is usually available in the economic calendar. Trendo users can find the most complete and accurate economic calendar through the Trendo website or the Trendo application.
News release time:
The exact release time of economic events, reports & data is shown in the economic calendar.
Source and country:
The data and reports of different countries are separated in the economic calendar.
Data types and events:
The data and economic reports or events type and the countries' economic officials' speeches are shown clearly in the economic calendar. For example, the time of setting the US interest rate and the US central bank's chairman speech are specified separately in the economic calendar.
The previous value of indicators:
In the economic calendar, you can see the previous value of the published indicators, and check the values published in the past, and compare & conclude from these past values to predict the current and expected value of the market.
Current or actual value:
The index and economic data results will be determined and published precisely at the specified time in the economic calendar.
Importance of data or events on the forex market:
Usually, in the economic calendar, the importance of the news is indicated by colors. For example, red shows the news importance and high impact, orange shows medium importance, and yellow shows less importance.
As mentioned, the data are of different importance in the economic calendar. In trades, some data that are more important in the economic calendar, and are usually shown in red, must be noted more. Since the US economy is the largest in the world, indicators and the state of this country's economy, in addition to the dollar, can affect the forex market's other currencies and assets, such as gold and oil, so one must pay more attention to the US news in the economic calendar. Further, the most important economic indicators are mentioned.
Determining the interest rate of countries' central banks: one of the most important economic indicators that shows a country's economic policies state is that country's interest rate determination, usually a country's central bank decides its interest rate on specific dates throughout the year, which affects the relevant currency's value and forex market's other currencies and assets. For example, the US central bank's (Federal Reserve) interest rate decision affects the US dollar and other currencies, such as the euro, as well as gold, oil, and the forex market's other assets.
Countries' central bank members' speech: the countries' central bank officials & members' speech time is shown in the economic calendar, and usually the countries' central bank presidents' speech is more important. These speeches specify the countries' central banks' monetary policies, which may greatly impact the respective currencies' trend in the forex market.
Employment reports: Countries usually publish monthly reports on employment and unemployment rates, and the publish time for each country is shown in the economic calendar. These reports are significant because they determine a country's economic status and play a direct role in deciding the economic policy of that country. One of the forex market's most important reports is the US Non-Farm Employment or NFP report, released on the first Friday of every month.
Inflation-related data report (CPI): Another important report of the forex market is the inflation rate, usually published in the form of different countries' monthly inflation reports, such as the consumer price index (CPI) on a monthly, quarterly, and annual scale and it shows the living expenses of that country's people. Inflation directly affects deciding the central banks' interest rates and monetary policies. For example, if inflation indicators show an increase, central banks will try to prevent a further increase in inflation by increasing the interest rate.
Gross Domestic Product (GDP) report: GDP is the total value of all final goods and services produced in a country, and in the forex market, they pay attention to the published numbers to check that country's economic status and growth.
So far, different countries' significant data published in the economic calendar that traders must note, were mentioned. But some economic data in the economic calendar are important and related to the United States and are less important for other countries. In general, because the world's largest economy belongs to the US, this country's economic data are more important in the forex market and should be noted more.
Purchasing Managers' Index (PMI): The purchasing managers index is a composite index that is released monthly. Using this index, you can check the state of a country's production and economic services. In the US, the ISM Institute releases this index.
Producer Price Index (PPI): The producer price index specifies wholesale and producer costs' changes. This index is an inflation type and is published monthly.
Retail sales reports: This index determines the consumer demand level for final goods and indicates the growth of a country's economic situation.
Consumer Sentiment Index: This index, determined by a survey of consumers, can indicate consumers' trust in the economy's future. In fact, with this index, consumers' feelings toward the economy and financial situation are determined.
Reports on housing situation: A country's most important economic pillar is Housing. In the economic calendar, reports such as new housing construction or the sale of newly built houses are published.
Companies' Profit reports: big companies like Apple and Google's income generating and profits reports can indicate the world's economic status.
Traders usually check the forex market economic calendar weekly and daily. You can follow the below steps to review the economic calendar.
General review of the economic calendar:
Because the forex market is closed on Saturdays and Sundays, on these two days, traders extract the economic calendar news and events every week from the websites and applications and review them in general.
Identifying the major news and events during the week:
Traders must briefly look at the economic calendar daily and consider the important news related to their trades. For example, a trader who has a gold trade should note the US dollar news that is red.
The economic calendar daily review:
As mentioned earlier, the importance of news in the economic calendar is determined by color, yellow news is less important and will not affect the financial markets much, but news with orange and especially red colors has an impact on the financial markets. For more trading success, a trader should recognize and note important news and events about the currencies he trades. For example, the interest rates news, inflation, and other significant things should be recognized at the beginning of the week and included in the trading plan.
News review & analysis before release:
Traders should check the data and important news affecting their trades before the release. Traders can check the previous data amount and the effect of data on the chart when it was published in the past. Also, traders should pay attention to the forecast value and consider the available possibilities in their trades.
News analysis after release:
When important news is released, the symbol related to the news may fluctuate greatly, but a few hours after the news release, the market will find its main path under the influence of the published value. For example, if the US employment data is very good, contrary to expectations, the dollar may weaken in the first moments, and then rise after a few hours due to the good employment status.