Fundamental Economic Indicators

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Scorpion
4008
Scorpion  

Fundamental indicators or economic indicators are as important as the technical indicators that you came to know first hand while learning FOREX.

To assist you in mastering the other side of analysis, we compiled an extensive list of articles on fundamental analysis and important economic indicators.

The following articles are of no particular orders. You may selectively read only the articles of your interest.

Employment Situation - Household and Establishment Data

The employment situation is the lead monthly indicator of the aggregate economic activity since it combines all the major sectors of the economy. It is very detailed and elaborate and is always conveniently available at the beginning of the month. Many other economic indicators will rely upon the information obtained from this report. It encompasses information about the labor market, the income and production as well as the production rates. Read More...

Weekly Jobless Claims

This is the average Weekly Initial Claims for Unemployment Insurance, which will include any notice of unemployment filed to request a determination of entitlement to and eligibility for compensation, or to begin subsequent period of eligibility within a benefit year or period as long as the individual remains eligible. Read More...

GDP - Gross Domestic Product

GDP is one of the most comprehensive and closely watched economic statistics. This is because several government institutions make key decisions concerning the economy using it. The White House and Congress uses the GDP statistics to prepare the Federal budget, the Federal Reserve formulates monetary policy basing on the same. Read More...

Central Bank Interest Rates

These are the interest rates levied by the government on any moneys borrowed from the Federal Reserve banks. This rates ones set by the Federal Reserve board apply to all other banks as they also have to keep their reserves with the federal bank. It therefore means that they too have to pass the same rates over to their clients in the money supply chain. Read More...

Federal Reserve Money Supply

According to the legislation passed in 1978, the Federal Reserve was mandated to set annual targets for money supply growth. At the time, there was a high link between money supply growth and the overall economic growth, as measured by the GDP. Read More...

Durable Goods Orders

The durable orders release measures the dollar volume of orders, shipments, and unfilled orders of durable goods which are defined as goods whose intended lifespan is three years and over. Orders are considered a leading indicator of high production in the economy since most of them are in the form of machinery and equipment used in the construction or manufacturing and mining industries. Read More...

Current Account Balance

The current account balance is one of the two main metrics of the nature of a country's foreign trade; the other is the net capital out flow. The current account surplus signifies an increase in a country's net foreign assets by the corresponding amount, and a current account deficit indicates the exact opposite. Read More...

CPI - Consumer Price Index

The consumer price index is very important despite being a backward-looking indicator; it has a big influence on interest rates, the economy, and stock and bond prices. The CPI is used to make adjustments to cash flow mechanisms such as pensions, Medicare, adjustments to insurance policies among others. Read More...

PPI - Producer Price Index

It measures changes in the selling prices producers charge for goods and services that they provide to the consumers, it also traces down how the prices relate to the production costs and processes. Producers tend to pass on higher costs to consumers in the form of higher retail prices; the PPI is valuable as an early indicator of inflation. Read More...

ISM Manufacturing Survey

The ISM Survey responses reflect the change in the current month compared to the previous month. For each of the indicators measured, this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction. Read More...

Employment Cost Index

The Employment Cost Index is a measure of labor compensation per hour worked. It includes all wages, salaries, and benefits paid by employers to employees for work done. Wages and salaries are based on the straight-time average hourly earnings, while the benefits include paid leave as well as some employer paid services such as insurance premiums, retirement packages, and contributions to savings schemes among others. Read More...

Scorpion
4008
Scorpion  

Factory Orders

Factory orders is an indicator that is more like the durable goods orders except for the fact that it includes all orders including the durable and non-durable manufacturing stuff such as apparel and perishable products like foods among other items. Read More...

Personal Income and Spending

Personal Income and Spending is a comprehensive monthly summary of personal income and spending, produced by the Bureau of Economic Analysis (BEA). The report collects data about the individuals' income sources and his expenditure. The report also contains data for the widely watched inflation indicator known as the personal consumption expenditures (PCE). Read More...

Retail Sales

Retail Sales is the monthly measurement of all goods sold by retailers based on a sampling of different categories of stores across the country. The statistics do not include the sale of services. Read More...

New Home Sales

New Home Sales is the monthly report of new single-family home sales. It is produced by the census bureau and contains prices and inventory figures of new homes at the national level. Read More...

Existing Home Sales

Existing Home Sales is a report that details the sale of already constructed homes that have been in the market and are simply changing ownerships as people change dwellings either because of preference, having moved to new areas or any other reasons. Read More...

Scorpion
4008
Scorpion  

Business Inventories

This is a report that entails a breakdown of all business orders that are lying in the manufacturers’ stores, the traders’ stores and in all retail outlets across the country. There are two version of the report - one for manufacturing sector and the other for non-manufacturing sector. Together, these two reports cover close to 90% of the economy. The report is used to establish the amount of backlog of goods and services that are in the stores of traders with a view to finding just how long the goods may stay before being sold. Read More...

Chicago Purchasing Managers Index (PMI)

A Purchasing Managers Index (PMI) is an economic indicator; it is a composite index based on five major indicators including new orders, inventory levels, production, supplier deliveries, and the employment environment. Each indicator has a different weight and the data is adjusted for seasonal factors. Read More...


Fed Beige Book

A commonly used name for the Fed report entitled "Summary of Commentary on Current Economic Conditions by Federal Reserve District." It is published just before the Federal Open Market Committee (FOMC) meeting on interest rates and is used to inform the members on changes in the economy since the last meeting. The beige book generally consists of reports from bank and branch directors and interviews with key business contacts. Read More...

Import and Export Prices

A price index tracks purchasing power by measuring how the price of goods and services is changing. The export and import price indices are used to show the value and prices of goods and services getting into and out of the U.S. market. The index uses a benchmark approach, similar to the CPI, to measure the change in U.S. dollar prices of goods or services purchased from abroad by U.S. residents as well as the goods and services sold to the foreign market from the U.S. Read More...

Survey of Consumer Sentiment

This is a telephone-based survey of consumers across the states to gauge their confidence regarding personal finances, business conditions and their overall purchasing power. Read More...

Scorpion
4008
Scorpion  

OECD Composite Leading Indicators (CLI)

OECD Composite Leading Indicators (CLI) is a collection of indicators from 30 countries that strongly believe in the free market system. These countries hold the OECD meeting to make decisions regarding the markets which have impact on the entire region of the 30 member countries. OECD stands forte organization for Economic Cooperation and Development. Read More...

Germany Industrial Production

The German industrial production reflects the industrial performance of the German economy. It measures the per volume change in output from mining, quarrying, manufacturing, energy and construction sectors in Germany. Germany being the second largest industrial products exporter plays a major role in the direction of the European economic trends. Read More...

International Trade In Goods And Services (Trade Balance)

Trade balances are evaluations of the relationship between the imports and exports of a given country. Particularly, the purpose of the trade balance is to determine if the amount of goods and services leaving the country is reasonably balancing in good levels with goods and services being imported into the country. Properly assessing the current balance of trade for a given country provides key information about the overall economic health of the nation. Read More...

Germany IFO Business Survey

The German IFO business index is a survey of top business executives in the German economy with the objective of gauging the country’s economic performance. It is however not an accurate figure base on exact digits. It is simply meant to get the perception of major players who have the ability to get the relevant information about possible future economic activity basing on the facts already in their possession. These facts are mostly on the purchases and impeding orders that will most likely influence the economic growth or decline in their respective sectors.Read More...

Euro-Zone Manufacturing Purchasing Managers Index (PMI)

Euro-Zone Manufacturing Purchasing Managers Index (PMI) is a gauge of the overall performance of the European manufacturing sector carried out by asking executives about sales and employment outlook, the survey strives to give information on the business climate that can lead to developments in employment, output as well as consumption. It is important to note that this survey is about the perception of the executives and is not based on actual figures; it is however note worthy that these executives derive their perceptions from tangible statistics in their possession. Read More...

Japan Tankan Survey

Japan Tankan Survey is a largely influential Japanese economic confidence survey carried out every quarter of the year to gauge the business confidence or in confidence among different business executives. Read More...

Housing Starts And Building Permits

The number of new home constructions and construction permits authorized within a given period is a positive show of economic growth. When the population has very little money at their disposal to spend, it is very unlikely to find people buying homes. Even mortgages become difficult to service. Since most constructions are funded by financial institutions like banks. These institutions have dynamic interest rates charged on loans. The interest rates are largely determined by the economic growths in relation to demand versus supply of the loans. When lending rates come down it clearly, shows that the banks have much cash in their reserves that they are eager to introduce into circulation. Read More...

ZTrader
262
ZTrader  

If you can truly absorb all of that information and make sense of it - and turn it into reliably accurate forecasts - I take my hat off to you.

I have found that the reaction of any market to any particular piece of news is often nearly random, both in magnitude and in direction. Many times a good economic report seems to depress the affected currency when analysts predict it will support it and vice versa. Often a piece of apparently important news goes virtually unnoticed by the market while something which should be unimportant causes a panic.

I hold to the old adage that all fundamental aspects are reflected in the price action, so why not just trade the price action? Leave the voodoo to the witch doctors!!

bobo85
4
bobo85  

hi im newb of forex,...

this info help me

thanks

FoReXExPeRt
419
FoReXExPeRt  

Thanks Scorpion..thats a very nice list. Do you know of any trading system that takes advantage of these indicators?

kevinator
1739
kevinator  

Economic indicators are the real movers of the market.Central and commercial banks are the traders that buy and sell large volumes of currency based on a country's economic standings.For instance interest rates are the single biggest factor in the market.Once every two months a central bank will evaluate their current position and set their country's interest rates and announce this to the open market, this is the time when the market moves higher of drops 150+ points in one bar for it seems no reason at all.Well..the central bank just released their current interest rates or how much interest you can get annually if you buy large volumes of their money immediatly

Smart money plays the interest game for example as of now AUD 3% NZD 2.5% EUR 1% GBP.50%CHF.25 USD .25% and JPY.10%.Based on this statement with my million dollars which country's money will give me the highest interest on my money..right Australian dollars...so what happens when central bank of australia announced they will move interest rates form 2.5 to 3.0 percent....a huge bar as big as the empire state building and the market moved 200pips in 5 minutes.....and where were you.......sitting there 5 minutes before they were going to announce this waiting to BUY AUD'd and SELL JPY"s...sell JPY's?..why?..now that AUD is the new desired currency JPY

has the least desired interest rates at 1.0% so even the central bank of japan says we need to buy AUD"s now and what happens to JPY....right the exact opposite of AUD there is a 200pip bar sell bar in 5 minutes....what has just happened?......the biggest single transfer of money in the market this month...billions traded in a matter of minutes. And the market continues to move higher for weeks after this news as it is truly the driving force behind our market forex.

What pair will give me the most action based on the above interest rate statement.I am a deviation trader who will only trade interest rates that will give me the wildest swing up and down and I do this by taking the highest interest rate AUD and the lowest JPY so what do I trade..AUD/JPY pair this is called deviation trading.Pair's with the same of closer interest rates dont get as much movement as large devition pairs for instance if USD interest rate is .25 and CHF interest rate is .25 the pair will range up and down in a tight spiral and never break out this month..........So what will break this pair out of the tight spiral.........more news and the market is anxiously waiting this news due to be released shortly...we will say CHF employment report is bad this month(last month 2million new jobs this month 1.5 new jobs so genious thinks their is a job crisis in swiss so lets take our money out of their economy so what happens....60pip bar sell all at once....what does this mean to us traders...usd/chf just broke out of the tight spiral to a selling trend caused by economic news.....I will post more on this subject later.

FoReXExPeRt
419
FoReXExPeRt  

Fundamental & technical indicators are both very important when trading & should/can be used interdependently in order to maximize profit.

pro_atro
452
pro_atro  

Fundamental Analysis is simple observing the economy for the better and ultimately coming up with your own judgments about the state of the economy. There's economic and real work indications.

ramkumar
6
ramkumar  

mail id: (email address removed by admin)

name: ramkumar

iam new for fxtrading. give some details about very best indicators and signals

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