Week Ahead: Economic Indicators (Europe)
Hey, Traders!
For the February 10th 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.
Thursday 13th February
02:00 ET
UK Manufacturing Production
Manufacturing Production measures the change in the total inflation-adjusted value of output produced by manufacturers. Manufacturing accounts for approximately 80% of overall Industrial Production.
What to expect:
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. GDP QoQ is a leading indicator of U.K. economic health.
What to expect:
High levels of GDP growth are viewed as being positive for U.K. indices as well as the GBP. Low levels of growth are negative to most asset classes and are common to recessionary cycles.
German HICP
The Harmonized Index of Consumer Prices is an index of consumer prices, on the basis of a statistical methodology that has been harmonised across all EU member states.
The consumer price index (CPI) is an average measure of the level of the prices of goods and services bought for the purpose of consumption by the vast majority of households in Germany.
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.
2:30 ET
Swiss CPI
CPI is an average measure of the level of the prices of goods and services bought for the purpose of consumption by Swiss households. Monthly and annual changes in the CPI provide widely used measures of inflation. The policy target measure for the Swiss National Bank (SNB), the annual CPI rate can be distorted by swings in prices amongst the more volatile subsectors and the CPI excluding fresh food and energy is used as a better guide to underlying short-term trends. Although not a member of the Eurozone, a harmonized index of consumer prices (HICP), measured according to Eurostat’s procedures, is also published alongside the CPI.
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.
Friday 14th February
05:00 ET
Eurozone GDP Flash Estimate
Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform.
What to expect:
High levels of GDP growth are viewed as being positive for European indices as well as the EUR. Low levels of growth are negative to most asset classes and are common to recessionary cycles.
