EURO.uz -The Forex quick guide for beginners and private traders

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The Forex quick guide for beginners and private traders

[M] Current Account


BEA (Bureau of Economic Analysis); quarterly, around six weeks after quarter end
The difference between a nation's total exports of goods, services, and transfers, and its total
imports of the same. Current account balance calculations exclude transactions in financial
assets and liabilities. The level of the current account is followed as an indicator of trends in
foreign trade, so it is regarded as a big market mover.

[M] Durable Goods


Bureau of Census; the fourth week of each month, 8:30am EST, covers previous
month data
Durable Goods Orders measures new orders placed with domestic manufacturers for
immediate and future delivery of factory hard goods. A durable good is defined as a good that
lasts an extended period of time (over three years) during which its services are extended.

Rising Durable Goods Orders are normally associated with stronger economic activity, and can
therefore lead to higher short-term interest rates. Higher rates often support a currency, at
least in the short term.

[M] GDP Price Deflator


BEA (Bureau of Economic Analysis); last day of the quarter, 8:30am EST, covers
previous quarter data
The GDP deflator shows how much a change in the base year's GDP relies upon changes in the
price level. Also known as the "GDP implicit price deflator." As it is not based on a fixed
basket of goods and services, the GDP deflator has an advantage over the consumer price
index (CPI). Changes in consumption patterns, or the introduction of new goods and services,
are automatically reflected in the deflator. This indicator is of medium importance to the
markets.

[M] Housing Starts


Bureau of Census; around the middle of each month, 8:30am EST, covers previous
month data
This economic indicator tracks how many new single-family homes or other residential
buildings were constructed through the month. For the survey, each house and each single
apartment is counted as one housing start. This indicator is not a huge market mover, but it
has been reported by U.S. Census that the housing industry represents over 25% of all
investment dollars, and a 5% value of the overall economy. Housing starts are considered to
be a leading indicator, meaning it detects trends in the economy looking forward. Declining
housing starts show a slowing economy, while increases in housing activity can pull an
economy out of a downturn.

[M] Industrial Production Capacity; Production Utilization


Federal Reserve; middle of the month, 9:15am EST, covers previous month data
It is a chain-weighted measure of the change in the production of the nation's factories,
mines and utilities as well as a measure of their industrial capacity and of how many available
resources are being used (commonly known as capacity utilization). In addition, the Capacity
Utilization Index provides an estimate of how much factory capacity is in use. They are
important indicators, as the manufacturing sector accounts for one-quarter of the economy.

[M] Initial Jobless Claims


Department of Labor; once a week on Thursday at 8:30am EST, covers previous week
data
The data states the number of people who applied to receive unemployment pay for the first
time. It has low to medium importance as this relates to weekly data with high fluctuations;
the average of four weeks is more stable.

[M] Philadelphia Fed Index (Business Outlook Survey)


Federal Reserve Bank of Philadelphia; Around the 17th of each month, 10:00am EST,
covers previous month data
The Business Outlook Survey is a monthly survey of manufacturers located around the states
of Pennsylvania, New Jersey and Delaware. Companies surveyed indicate the direction of
change in their overall business activity and in the various measures of activity at their
plants. The index signals expansion when it is above zero and contraction when below. This
index is considered to be a good indicator of changes in everything from employment, general
prices, and conditions within the manufacturing industry. It isn't a big market mover, but the
results found in the survey can indicate what to expect from the Purchasing Managers' Index
(which comes out a few days later and covers the entire U.S.).

[M] PPI - Producer Price Index; Core-PPI


Bureau of Labor and Statistics; the second full week of each month, 8:30am EST,
covers previous month data
The PPI is not as widely used as the CPI, but it is still considered to be a good indicator of
inflation. This indicator reflects the change of manufacturers' cost of input (raw materials,
semi-finished goods, etc.). Formerly known as the "Wholesale Price Index", the PPI is a basket
of various indexes covering a wide range of areas affecting domestic producers. Each month
approximately 100,000 prices are collected from 30,000 production and manufacturing firms.

It is not as strong as the CPI in detecting inflation, but because it includes goods being
produced, it is often a forecast of future CPI releases.

[L] Beige Book


Federal Reserve Board; two Wednesdays before every FOMC meeting, 8 times per
year, 2:15pm EST
Beige book is the commonly used term for the Fed report entitled: "Summary of Commentary
on Current Economic Conditions by Federal Reserve District". It is published just before the
FOMC meeting on interest rates and is used to inform the members on changes in the
economy since the last meeting. This report is published eight times per year. The Beige Book
is not considered to be a big market mover. It is a gauge of the strength of the economy and
not a commentary on the views of Fed members. Occasionally it can move markets if the
findings are substantially different from analyst expectations.

[L] ECI - Employment Cost Index


Bureau of Labor and Statistics; the last Thursday of Apr, Jul, Nov and Jan, 8:30am
EST, covers previous quarter data
The ECI tracks movement in the cost of labor which includes wages, fringe benefits, and
bonuses for employees at all levels of involvement The Bureau of Labor surveys over 3,000
private sector firms and over 500 local governments, schools and other public sector
organizations. This indicator is not widely watched, but it is among a select group of
indicators that have enough power to move the markets. This is particularly true in
inflationary times. The idea behind the ECI is that as wage pressures increase, so does
inflation. This is mainly because compensation tends to increase before companies increase
prices for consumers (inflation).

[L] PCE - Personal Consumption Expenditure


BEA (Bureau of Economic Analysis); last day of each month, 8:30am EST, covers
previous month data
PCE measures price changes in consumer goods and services. The PCE is a fairly predictable
report that usually has little impact on the markets. The Core PCE, which is the index less
prices of food and energy, estimates inflationary trend more precisely.

 

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