TOP MARKET NEWS EVENT

Top 5 Market News Events

1.Central Bank Rate Decision

Each month the various Central Banks of the world’s economies meet to decide over the interest rates they are responsible for. The decision they have to make is whether to leave rates unchanged, raise rates or lower rates and the outcome of this decision is extremely important to the currency of the economy and as such, to traders.

An increase in rates is generally seen as bullish for the currency (meaning it will increase in value) and a decrease in rates is generally bearish for the currency (meaning it will decrease in value) whilst an unchanged decision can be either bullish or bearish depending on the perception of the economy at the time.

Whilst the actual decision itself is crucial, so too is the accompanying policy statement here the Central Bank gives it’s overview of the economy and how they view the future outlook. This is also where monetary policy is announced, which concerns vital matters such as the implementation of QE, which we explain thoroughly in our Forex Mastercourse.

2.GDP ( Gross Domestic Product )

The Gross Domestic Product is an important indicator of economic health in a country. A country’s central bank has expected growth outlooks each year that determine how fast a country should grow, as measured by GDP.

When GDP falls below market expectations, currency values tend to fall and when GDP outdoes expectations, currency values tend to rise. As such this figure’s release is keenly observed by currency traders and can be used to cautiously anticipate Central Bank movements.

3.CPI (Inflation Data)
Consumer Price Index is the most widely used inflation measure out of the various economic indicators. The index gives information about the historical average prices paid by consumers for a basket of market goods and highlights whether the same goods are costing more or less for consumers.

Central Banks monitor this release to help guide them in their rate and policy setting. If inflation is seen to be evident, and moving beyond a certain target then interest rate rises are used to counter this.

4.Unemployment Rate.
The unemployment rate of a country is crucial to markets given its importance to Central Banks as an indicator of the health of an economy. Higher employment leads to interest rate rises as Central Banks aim to balance inflation with growth and as such this figure draws huge market attention from traders.

Alongside the Unemployment rate the two most important labour statistics are the US 

ADP and NFP figures released each month with the NFP taking prime position. This figure is so important we do an NFP preview each month giving you our analysis on the release and how to trade it. Given the market’s current attention to the likely date of a Fed rate hike, this figure is growing in importance each month.

The ADP data is considered an important predictive tool for the NFP as it is released beforehand.

5.FOMC Meeting
Although the Central Bank meetings of all economies are extremely important, America’s Federal Open Market Committee meeting takes canter stage as the US Dollar is currently the world’s reserve currency.

Each month the committee meets to set rates and to give it’s pronouncement on current economic conditions and the effectiveness of current monetary policy, casting an eye forward to expectations of future economic conditions and adjoining monetary policy.

The committee is made up of members which vote at each meeting with “Hawkish” members those in favour of a rate rise and “Dovish” members those favouring a lowering of rates.

The statement released by the Committee is keenly scrutinized by traders looking for clues as to how the Central Bank will behave in future and even the most seemingly inconsequential of ter

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