Economic Indicators

Foreign Exchange Trading (FOREX): Analysis & Management Economic Indicators

Prepared and presented by Dr. Ahmad Khasawneh

FOREX Fundamental Analysis The Economics Indicators Analyzing the data: – Evaluating data changes (over time, compared to the market participant forecast, relative to the business cycle, compared to previous periods average, normal range). – Assessing whether the data change is significant or not.

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FOREX Fundamental Analysis The Economics Indicators  U.S. Economics Statistics: 1) Unemployment: is the percentage of the unemployed people to the total labor force in the economy. Market Typical Period Covered Significance Released Time

Very High

03:30 PM Prior Month First Friday of the month 3

FOREX Fundamental Analysis The Economics Indicators

- Employment Decrease - Unemployment increase

U.S. Dollar will depreciate

- Employment Increase - Unemployment Decrease

U.S. Dollar will appreciate 4

FOREX Fundamental Analysis The Economics Indicators • Employment tends to grow the fastest during the recovery phase of the cycle – 260k per month. • Employment tends to grow 100k faster during the rapid growth phase than the slower phase. • The significant unemployment rate change is about 0.2pp. 5

FOREX Fundamental Analysis The Economics Indicators 2) Gross Domestic Product (GDP): Market Significance

Typical Released Time

Period Covered

Very High

03:30 PM About the 20th day of the month

Prior Quarter

(for initial estimate of quarter)

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FOREX Fundamental Analysis The Economics Indicators - GDP Decrease

- GDP Increase

U.S. Dollar will depreciate

U.S. Dollar will appreciate

• 0.1pp on a quarter to quarter basis is the minimum

significant Variation.

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FOREX Fundamental Analysis The Economics Indicators 3) Consumer Price Index (CPI): Market Significance

Typical Released Time

Period Covered

High

03:30 PM About the 10th day of the month

Prior Month

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FOREX Fundamental Analysis The Economics Indicators

- CPI Decrease - CPI Increase

U.S. Dollar will depreciate U.S. Dollar will appreciate

• The normal range of the CPI change lies between 0.1% - 0.5%. 9

FOREX Fundamental Analysis The Economics Indicators 4) Producer Price Index (PPI): Market Significance

Typical Released Time

Period Covered

High

03:30 PM About the 10th day of the month

Prior Month

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FOREX Fundamental Analysis The Economics Indicators

- PPI Decrease

- PPI Increase

U.S. Dollar will depreciate

U.S. Dollar will appreciate

• The normal range of the CPI change lies between 0.0% - 0.5%. 11

FOREX Fundamental Analysis The Economics Indicators 5) Employment Cost Index (ECI): Market Significance

Typical Released Time

Period Covered

Moderate

03:30 PM

Prior Quarter

Last Thursday of the 1st month of the new quarter 12

FOREX Fundamental Analysis The Economics Indicators

- ECI Decrease - ECI Increase

U.S. Dollar will appreciate U.S. Dollar will depreciate

• The average quarterly increase in the ECI was 1.2% and 1.4% in the recession and recovery, and 1.1% in the expansion. 13

FOREX Fundamental Analysis The Economics Indicators 6) Average Hourly Earnings: Market Significance

Typical Released Time

Period Covered

Moderate

03:30 PM 1st Friday of the month

Prior Quarter

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FOREX Fundamental Analysis The Economics Indicators

- Hourly Earning Decrease - Hourly Earning Increase

U.S. Dollar will depreciate U.S. Dollar will appreciate

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FOREX Fundamental Analysis The Economics Indicators 7) National Association Purchasing Manager (NAPM): Market Significance

Typical Released Time

Period Covered

High

03:30 PM Prior month First day of the month 16

FOREX Fundamental Analysis The Economics Indicators - NAPM Decrease - NAPM Increase

U.S. Dollar will depreciate U.S. Dollar will appreciate

• The diffusion index can range between 0 and 100 percent. With 50% implying no net change; above 50% suggesting improvement; and below 50% represent a contraction. 17

FOREX Fundamental Analysis The Economics Indicators 8) Retail Sales: Market Significance

Typical Released Time

Period Covered

High

03:30 PM Mid of the month

Prior Quarter

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FOREX Fundamental Analysis The Economics Indicators

- Retail Sales Decrease

U.S. Dollar will depreciate

- Retail Sales Increase

U.S. Dollar will appreciate

• The normal range of retail sales 0.0% - 1.2%. • The normal range of retail sales ex-auto 0.1% - 1.0%. 19

FOREX Fundamental Analysis The Economics Indicators 9) Home Sales: Market Significance

Typical Released Time

Period Covered

Moderate

04:00 PM Prior Quarter Near the end of the month 20

FOREX Fundamental Analysis The Economics Indicators

- Home Sales Decrease

U.S. Dollar will depreciate

- Home Sales Increase

U.S. Dollar will appreciate

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FOREX Fundamental Analysis The Economics Indicators 10) Car and Truck Sales: Market Significance

Typical Released Time

Period Covered

Moderate

Between the first and third day of the new month

Prior Month

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FOREX Fundamental Analysis The Economics Indicators

- Car & Truck Sales Decrease - Car & Truck Sales Increase

U.S. Dollar will depreciate U.S. Dollar will appreciate

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FOREX Fundamental Analysis The Economics Indicators 11) Consumer Confidence Measures: Market Significance

Typical Released Time

Period Covered

Moderate

05:00 pm last Tuesday of the month

Prior Month

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FOREX Fundamental Analysis The Economics Indicators

- Consumer Confidence Decrease

U.S. Dollar will depreciate

- Consumer Confidence Increase

U.S. Dollar will appreciate

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FOREX Fundamental Analysis The Economics Indicators 12) Personal Income and Consumption: Market Significance

Typical Released Time

Period Covered

High

03:30 PM About the 10th day of the month

Prior Month

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FOREX Fundamental Analysis The Economics Indicators

- Income & Consumption Decrease

U.S. Dollar will depreciate

- Income & Consumption Increase

U.S. Dollar will appreciate

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FOREX Fundamental Analysis The Economics Indicators 13) Durable Goods Orders and Shipments: Market Significance

Typical Released Time

Period Covered

Moderate up to 03:30 PM Prior Month High around the 10th business day of the month 28

FOREX Fundamental Analysis The Economics Indicators

- Orders & Shipments Decrease - Orders & Shipments Increase

U.S. Dollar will depreciate U.S. Dollar will appreciate

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FOREX Fundamental Analysis The Economics Indicators 14) International Trade of Goods and Services: Market Significance

Typical Released Time

Period Covered

Moderate

03:30 PM Third week of the month

Prior two month

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FOREX Fundamental Analysis The Economics Indicators

- Trade Balance Deficit Increase

U.S. Dollar will depreciate

- Trade Balance Surplus Increase

U.S. Dollar will appreciate

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FOREX Fundamental Analysis The Economics Indicators 15) Unemployment Insurance Claim: Market Significance

Typical Released Time

Period Covered

Moderate

03:30 pm Prior Week Every Thursday Ending Saturday

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FOREX Fundamental Analysis The Economics Indicators

- Jobless Claims Decrease - Jobless Claims Increase

U.S. Dollar will appreciate U.S. Dollar will depreciate

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