
Week Ahead: Economic Indicators (Europe)
January 21st, Tuesday
Releases
02:00 ET
UK Unemployment Change
Change in the number of people claiming unemployment-related benefits during the previous month, released by the ONS (Office National Statistics). As the UK provides a lot of benefits to its population, requiring a lot of money, the more people that sign on, the money that will have to be pooled from the government’s budget to support people.
UK Unemployment Rate
The ILO (International Labour Organisation) Unemployment Rate released by the National Statistics is the number of unemployed workers divided by the total civilian labor force. It is a leading indicator for the UK Economy. If the rate is up, it indicates a lack of expansion within the U.K. labor market. As a result, a rise leads to weaken the U.K. economy. Generally, a decrease of the figure is positive (or bullish) for the GBP, while an increase is negative.
UK Employment Change
Change in the number of employed people. Data represents the 3-month moving average compared to the same period a year earlier.
UK Average Weekly Earnings Ex Bonus
The Average Earnings Index is an indicator of inflationary pressures emanating from the labour market. The effect of a higher or lower figure than expected can be both bullish or bearish.
UK Average Weekly Earnings
The Average Earnings Index measures change in the price businesses and the government pay for labor, including bonuses. The Average Earnings figure gives us a good indication of personal income growth during the given month.
Market Reaction
Generally, a high reading is seen as negative (or bearish) for the GBP, while a low reading is seen as positive (or bullish).
05:00 ET
German ZEW Economic Sentiment
The ZEW Indicator of Economic Sentiment is calculated from the results of the ZEW Financial Market Survey. The ZEW is followed closely as a precursor and predictor of the Ifo Sentiment Survey and as such is followed closely by market participants. The data is released around the middle of the month for the current month. The survey provides a measure of analysts’ view of current economic conditions as well as a gauge of expectations about the coming six months. The latter measure tends to have the larger market impact and reflects the difference between the share of analysts that are optimistic and the share of analysts that are pessimistic. About 350 financial experts take part in the survey.
German ZEW Current Conditions
This survey summarizes the net percentage of positive and negative responses regarding the expectations for economic growth in the next 6 months, as given by financial analysts from banks, insurance companies and large industrial enterprises. For example, if 50% believe that the economic situation will improve and 20% believe it will get worse, the result will be +30.
The survey deals with the markets of Germany, the USA, Japan, Great Britain, France, Italy and other EU countries.
Market Reaction
A reading that is stronger than forecast is generally supportive (bullish) for the Euro, while a weaker than forecast reading is generally negative (bearish) for the Euro.
January 23rd, Thursday
Releases
02:45 ET
French Business Climate Mfg
INSEE is France’s National Institute of Statistics and Economic Studies. INSEE’s business climate indicator aims to summarise the mood of French business leaders. The survey asks questions about output, orders and inventories and expectations for future business. These are synthesised into an overall index of sentiment, adjusted so that the long-run average is 100. The main focus is the manufacturing sector but the survey also provides separate confidence measures for construction, retail trade and services on a monthly basis and for wholesale trade every other month.
If you are looking for clues on French business sentiment, this survey would be a good starting point. The indicator is based on a survey that asks business leaders about their expectations for new orders and their overall impressions of the economy. The results are a diffusion index that reflects the difference between positive and negative responses as a percentage of the total number of answers.
French Business Climate Overall
This concept tracks the general state of the economy as it relates to businesses. it can include broad economy-wide conditions or specific economic conditions of a particular industry.
January 24th, Friday
Releases
Flash PMI reads 03:15 – 04:30 ET
Manufacturing PMI
The Manufacturing Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.
Services PMI
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).
Composite PMI
The Composite PMI Index measures the activity level of purchasing managers in both sectors (manufacturing and services). A reading above 50 indicates expansion in the sector; a reading below 50 indicates contraction.
A higher than expected reading should be taken as positive/bullish for a currency, while a lower than expected reading should be taken as negative/bearish for a currency.