Exploring the prime economic indicators in Forex market
The Forex market is a well-organized 24 hours online financial market which is encouraging the new traders to make their much better. But mastering the art of trading is not that simple. Most of the retail investors are not happy with their performance. Usually, the rookies are losing money since they don’t have basic knowledge about trading. Some of them might know the technical details but when it comes to fundamental analysis, they are completely novice. That’s why we are going to discuss some of the important fundamental events that you must know as a trader.
Employment reports
The United States employment report and the NFP report are some of the most observed economic indicators. These reports are published on the first Friday of every month. But when the first Friday is the first day of the month, the government will push the report back to the second Friday of the month. The Department of Labor publishes two reports which are the non-farm payroll report and employment rate report. The no-farm payroll report is the corporate report while the employment rate report is a household survey report.
The Non-farm payroll report is the most important report for currency traders and is the most viewed report. From the unemployment rate, you can learn about the percentage of unemployed people. You can also know the percentage of people who were hired and fired during the survey period. Read more here and enhance your knowledge of fundamental analysis so that you can take quality trades.
Inflation
The consumer price index (CPI) is the most observed inflation measure. During the survey period, the consumer price index displays the value of goods and services at the consumer level. The CPI is considered as the standard inflation guide for the United State economy. The consumer price index is published every month. The Forex traders should follow the CPI regularly.
The producer price index (PPI) is the second inflation gauge that traders should follow carefully. This index calculates wholesale inflation at the intermediate goods level. So with the inflation data, you should be able to get a long-term overview of the economic performance of a certain state.
Sentiment surveys
Sentiment data evaluations or critical surveys provide a vivid idea of regarding the alterations in the economy. If you want to get the idea about market direction, you will probably ask the manufacturers what is going before the government release the report about it. Purchasing managers reports (PMI) is a report on manufacturing and service level which is reported by most of the developed countries. There are many sub-components including prices paid and prices received, new orders, and backlogs which are evaluated by the surveys.
Housing reports
In the United State data set housing statistics holds a major place. Most individual’s earning in The United States is hung up in their house. Many housing-related economic indicators including housing starts, building permits, existing home sales, new home sales, and pending home sales are published every month. Housing prices and the employment numbers reflect the inflation rate. With the rising in housing prices rise, inflation will tend to rise.
If home prices increase, owners will start spending more. Housing starts informs the investors about the number of new houses which are in process of building. The contractor will need permission before building a house and it helps to predict the number of stars coming down the pipeline. From the new home sale, one can learn about the number of sales of new homes that are on the market for the first time. The existing sale figure differs from the new home sale as it shows the number of homes that were sold that have been sold once before.
In pending home sales, it reports about the houses that are in the contract and can be sold in the future. The NFP data, the inflation factors, and the housing and manufacturing numbers all are included in the Gross Domestic Product (GDP). This Gross Domestic Product or GDP reflects the collective growth in a country. This GDP report is very important for Forex traders as they need to learn about the overall economic condition for their future trade.