MAIN MACROECONOMIC INDICATORS UNITED STATES
Financial institutions, governments, central banks or even some private organizations regularly publish reports with sometimes significant impact on price movements in financial markets. The themes of these reports are extremely varied:
- Employment and unemployment,
- Manufacturing,
- Household consumption,
- Economic growth ...
It can be just as well as balances of outlook. These reports are commonly called "indicators" by financial markets, because they will influence more or less marked changes in the price.
We will therefore in this chapter will present the key indicators that impact the Forex market. These indicators relate to countries or economic areas representing the most traded currency on the Forex, namely the U.S., the eurozone, the UK and Japan. Previously, we briefly present the central banks of these four clusters, the importance of the course is undeniable.
Labor market
Reports on employment report Employment, Non Farm Payrolls: For employees working for non-agricultural private sector and public boards, reveals job creation; limits: Only 60% of responses are published on time, which involves many revisions (high margin of error) Establishment survey: Survey on wages, hours worked ...
Household survey: Survey on the percentage of the workforce, the unemployment rate ..., 95% of respondents match, so there is little error limits: No differentiation between full-time employment / part-no identification precarious, requires many revisions (high margin of error)
Application for unemployment benefits: Measure of new applications and total applications; reveals layoffs (detects the possibility of recession) and the situation of the labor market; limits: does not see job creation. Volatile, need to take into account the monthly averages
Growth
GDP GDP: Total is the value of what was produced and used to estimate the country's economic growth; limits: published a month after the quarter in question, is not actually update.
Production
ISM (Institute for Supply Management) manufacturing: Index measuring changes in the manufacturing sector according to five criteria: production, new orders, employment, delivery time, inventory. Effective measurement tool (if index greater than 42.7: global expansion of the economy, greater than 50: sector expansion, recession, if less). Capture both the trends in activity and detect downturns.
Chicago PMI (Purchasing Managers Index): identical to the ISM manufacturing but only for manufacturing firms in the Midwest. Published before the ISM manufacturing; limits: more volatile than the manufacturing ISM, it is not always a good indicator of the latter.
Industrial production index is a percentage of capacity used each month: if the industry is only 20% of the economy, it is the activity most cyclical, so the index is important for understanding economic cycles and downturns. Limits: the industry is stronger than other sectors by exceptional events such as strikes, weather ... Only 55% of results are available in time
Orders for durable goods (durable goods orders): Measure the commands sent to manufacturing companies with a life expectancy of more than 3 years. Relevant to understand the business opportunities and good indicator of the investment. Strongly correlated to GDP. Boundaries: highly volatile (because includes goods such as aircraft or defense equipment that are not good indicators)
Consumption
Retail sales: measure of the dollar amount spent on the month. First available information on household consumption (which is the largest component of GDP); limitations: only a third of total consumption, and these sales may be affected by price fluctuations. Low response rate (50%), need to renew the investigation to reach the required sample.
Private consumption, PCE (Personal Consumption Expediture): Measuring consumer spending (goods and services). Published data in value (most commented) and volume (most interesting). Gives a good general idea of the trend of consumption; limits: It is still missing the final month of the quarter with the release of GDP.
Consumer confidence: Michigan survey on consumer sentiment overall, their common conditions, their outlook (study of household finances and their perception of economic developments in the United States). Indicator has existed for 50 years. Can identify long term trends close to consumer trends. Short-term analysis rather unreliable to estimate a consumer trend. Depends heavily on political situations in progress.
Consumer confidence: Conference Board: Investigation of sentiments on Employment (now and in 6 months), economic conditions (current and 6 months), and household income. Good indicator of the changing labor market, independent of political developments and stock, depending on the labor market. Little correlated with household consumption and fairly volatile
Construction and Real Estate
Getting Yard and building permits (Housing starts): number of building permits and housing starts (by types of houses and by region, at the signing of the act). Good indicator of the changing real estate market, predicts residential investment (GDP component); limits: a bit simplistic
Sales of new homes (new home sales): measures sales of new homes (when the contract is executed). Good idea of the real estate market trends and future activity in construction. Limitations: Statistics volatile and likely to be substantially revised
Foreign Trade and Balance of Payments
Commercial Balance (Trade Balance): gap between exports and imports (by product and by country), value for services, and by value and volume for goods. Reflection of trade with the rest of the world, reveals the contribution of trade to GDP growth. Limitations: takes into account volatile because of heavy components (eg air) and / or seasonal
Net purchases by non-residents: measurement of long-term transactions with non-resident Americans. Sum of net purchases of U.S. securities and foreign securities by non-residents (if positive capital inflows to the U.S.). Preliminary data on financial flows between the U.S. and the world; Limitations: Only takes into account the long-term securities. Biased sharing between public and private sectors.
Prices, Wages, Productivity
Consumer prices (Consumer price): price measurement for a range of goods and services. The most watched index: CPI-U (all urban consumers). Most comprehensive measure of price trends. Determines inflationary pressures; limits: Possible overestimation of prices (ongoing improvement) Very volatile if one takes into account energy and food.
Producer prices (Producer Price): index of prices received by producers of goods. The index is the most studied of finished products (as opposed to raw goods and intermediate goods). Gives a good indication of price trends; limits: limited fields of action (does not include services). Very volatile if one takes into account energy and food.
Consumption deflator (PCE deflator): price index of private consumption. The index excluding food and energy (core PCE deflator) is the index considered by the Fed in the measure of inflation; limits: limited interest since the consumer price of the same month has already been published.
Cost index of employment (Employment Cost Index, CIS) is a measure of wages (70% of the index) and benefits paid by businesses (30% remaining). Measure the most comprehensive and reliable labor costs; limits: most of the information contained in this index are already known.
Productivity and unit labor costs: measures the change in output per hour worked in the private sector. Publication of real wages and unit labor costs. Detailed report for non-agricultural and non-financial: reliable data to assess the underlying productivity. The labor costs to determine a trend of inflation; limits: data of interest to economists, but less for markets because the interesting information about the already published
Monetary Policy
Beige Book: All reports of each Federal Reserve, and synthesis thereof. Affect consumption, manufacturing and services, real estate, banking, agriculture, energy, prices ... Good description of the economic situation. Very interesting if published before the monthly statistics of the same month. Limitations: Too qualitatively. Lack of appreciation by the Fed.
FOMC (Federal Open Market Committee): Monetary Policy Committee (seven members of the board, and five of the 12 regional bank presidents, including the NY). Ad rates and decisions in terms of future monetary policy. Limits: in general announcements about the rates have already been sent in advance to warn the market but possible surprises
FOMC Minutes: Summary of conversations that took place at the FOMC. Outlines the macroeconomic situation, focusing on strategic issues. Provides information on the concerns of the Fed.
Monetary Policy Report of Congress: Speech by President of the Fed before Congress and publication of monetary policy report. Publication of projections of growth and inflation for the current year and the year ahead. Unique opportunity to have quantitative predictions of the Fed.
you can see :
0 commentaires
Enregistrer un commentaire