Week Ahead: Economic Indicators (EU)
Hey, Traders!
For the November 11th week, here is a list of all of the major economic indicators being released during the EU Session, with a brief synopsis of what they represent and what to possibly expect from the markets in reaction.
Tuesday 12th November
02:00 ET
UK Unemployment Change
The ILO (International Labour Organisation) Unemployment Rate released by the National Statistics is the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the UK economy.
What to expect:
If the rate is up, it indicates a lack of expansion within the U.K. labour market. As a result, a rise leads to weakening the U.K. economy. Generally, a decrease of the figure is positive (or bullish) for the GBP, while an increase is negative.
German HICP
The Harmonized Index of Consumer Prices is an index of consumer prices calculated and published by Destatis, on the basis of a statistical methodology that has been harmonised across all EU member states. HICP is a measure of prices used by the Governing Council of the EU to define and assess price stability in the euro area as a whole in quantitative terms.
What to expect:
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the HICP are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
05:00 ET
German ZEW Economic Sentiment
The Mannheim-based Centre for European Economic Research (ZEW), asks German financial experts (up to 350 analysts and economists) every month for their opinions on current economic conditions and the economic outlook for Germany (as well as other major industrial economies). The responses are synthesised into two simple indices that provide a snapshot of how the economy is seen to be performing.
What to expect:
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
07:00 ET
OPEC Monthly Report
Thursday 14th November
03:30 ET
Dutch GDP
Gross Domestic Product (GDP) measures the total value of a country’s industrial output over a given period. It consists of the aggregate domestic production of goods and services by individuals, businesses, and government.
What to expect:
GDP QoQ is a leading indicator of EU economic health. High levels of GDP growth are viewed as being positive for EU indices as well as the Euro.
05:00 ET
Eurozone GDP
Gross Domestic Product (GDP) measures the total value of industrial output over a given period. It consists of the aggregate domestic production of goods and services by individuals, businesses, and government.
What to expect:
GDP QoQ is a leading indicator of EU economic health. High levels of GDP growth are viewed as being positive for EU indices as well as the Euro.
Friday 15th November
02:00 ET
UK Services
The Services Purchasing Managers’ Index (PMI) provides an estimate of service sector business activity for the preceding month by using information obtained from a representative sector survey incorporating transport and communication, financial intermediation, business services, personal services, computing and IT and hotels and restaurants. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting).
What to expect:
80% of the UK’S GDP is based on services. A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.
UK GDP
Gross Domestic Product (GDP) measures the total value of a country’s industrial output over a given period. It consists of the aggregate domestic production of goods and services by individuals, businesses, and government. Quarterly publications provide a much more detailed picture of the economy than the monthly indicators, covering all of gross domestic product (GDP), sector accounts, business investment, balance of payments, consumer trends, and profitability of UK companies.
What to expect:
GDP QoQ is a leading indicator of UK economic health. High levels of GDP growth are viewed as being positive for UK indices as well as the GBP.
02:45 ET
French CPI
The consumer price index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI represent the main rates of inflation. The national CPI is released alongside the HICP, Eurostat’s harmonized measure of consumer prices. A flash estimate was released for the first time in January 2016 and is now published towards the end of each reference month.
What to expect:
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
