Economic trends terminology
Fundamental analys autorebate cashback forexex forex broker rebate program technical analysis are the two ma forexrebatebest types of analysis methods used in foreign exchange investment, because the fundamentals largely affect the long-term direction of exchange rate movement, so fundamental analysis has become an essential analytical tool for medium and long-term investors, but because of the scope of fundamental analysis covers a large and complex, resulting in many investors to its sigh of relief The main content of this series are: various types of Economic indicators and forexbrokerrebateprogram data interpretation, economic policy overview, government statements and position overview, government intervention, etc. can most directly reflect the economic changes than the government published various economic data and indicators, the release of some important economic data will cause significant market fluctuations, and may even change the market trend in the short term We will start with the interpretation of economic data and indicators to help investors correctly understand, analyze, and judge these data GDP interpretation and indicators. We will start by interpreting economic data and indicators to help investors properly understand, analyze and judge these data GDP Interpretation GDP, or Gross Domestic Product, commonly abbreviated as GDP, is the most popular economic statistic in macroeconomics, as it is considered to be the most important indicator of national economic development GDP is the gross domestic product at market prices, which refers to a countrys (or region) the final result of the production activities of all resident units in a certain period of time that is, the value created by the factories invested by Japanese companies in the United States will also be counted in the GDP of the United States it involves real economic activities in terms of economics, GDP has three forms, namely value form, income form and product form from the value form, it is the value of all resident units in a certain period of time From the value form, it is the difference between the value of all goods and services produced by all resident units and the value of all non-fixed asset goods and services invested during the same period, i.e. the sum of the value added of all resident units; from the income form, it is the sum of the income directly generated by all resident units during a certain period; from the product form, it is the end use of goods and services minus the import of goods and services Of course, as ordinary investors, there is no need for us to go over The faster the GDP growth rate, the faster the countrys economic development, the slower the growth rate, the slower the countrys economic development, and if the GDP falls into negative growth, the country will undoubtedly fall into recession in general, if the GDP maintains a faster growth rate, it will bring support to the countrys currency, and vice versa for the countrys currency to play a negative role The growth rate here is a relative concept, assuming that the GDP growth rate of A and B is 1.5% and 0.5% respectively, although the growth rate is not fast enough, but if this speed is maintained for a period of time, the trend of the currency of country A will be better than the currency of country B. Only the GDP factor is considered here, the actual foreign exchange trend should be integrated with other factors, but GDP is one of the most important economic data, on the The GDP of Western countries is usually published monthly and quarterly, of which the GDP data published quarterly is the most important, investors should examine the results of the quarterly GDP compared with the previous quarter and the same period last year, the growth rate increased, or higher than expected, can be seen as a positive leading index interpretation LeadingIndicator (LeadingIndicator), also known as leading indicators or leading indicators. It is one of the most important economic indicators for predicting future economic development, and is the weighted average of various economic variables that guide the economic cycle. The leading index is composed of many elements and involves many aspects of the national economy, taking the leading index of the United States as an example, it mainly includes the following elements: 1. Consumer goods and raw materials orders4, sellers delivery performance and percentage of late deliveries from their factories5, contracts and orders for plant and equipment6, new private investment in construction permits7, M2 money supply8, S&P 500 stock index and dividend income9, Michigan consumer confidence index10, the difference between production costs and selling pricesIf most of these factors are positive, the leading index can be expected to rise in advance. If the leading index declines for three consecutive months, the economy is about to enter a recession; if it increases for three consecutive months, the economy is about to boom or continue to expand. After World War II, the leading index has been successfully used to predict the economic boom and bust turning points in developed Western countries. The U.S. Department of Commerce publishes the leading index, the time roughly in the last business day of each month other countries such as Japan, Switzerland, Canada, Germany, etc. will also publish the leading index, Germanys ZEW economic sentiment index and IFO economic sentiment index also contains a certain leading index meaning Retail Sales Interpretation Retail Sales (RetailSale), in fact, is a statistical summary of the amount of retail sales, including all major The total value of goods sold in cash or credit by stores engaged in the retail business, and the costs incurred by the service industry are not included in Retail Sales. In the U.S., the Bureau of Statistics of the Department of Commerce conducts a monthly national sample survey of retailers of all types and sizes (all companies registered with the Department of Commerce). Since it is difficult to collect and calculate data on the service sector, it is excluded, but the service sector is also an important part of consumer spending, and the increase or decrease in consumption can be derived from the data on personal consumption expenditure (including retail sales of goods and services). In addition, since food and energy sales are heavily influenced by the season, they are sometimes excluded and a core retail sales figure is released. In the United States, retail sales data for the previous month are usually released on the 11th-14th of each month. Many economists exclude some of the indicators for the purpose of analysis, mainly food and energy prices, which are prone to volatility, from the index. However, if the consumer price index rises too much, it indicates that inflation has become a destabilizing factor in the economy. In the United States, the current Consumer Price Index is based on the average price level from 1982 to 1984, covering seven categories of housing, food, transportation, health care, clothing, entertainment, other, and 364 items. The construction indicators generally occupy a more important position in the data system published by countries, because the real estate industry has a pivotal role in modern economies, and a countrys economic prosperity is often reflected in the construction indicators housing construction is an investment, which is an important driving force for national economic growth. In Western countries, new housing starts and construction permits are two of the more important construction indicators, which are basically residential or non-industrial building categories. Important, because changes in residential construction will point directly to economic recession or recovery in the United States, the general new housing starts are divided into two types: single-family homes and group housing single-family homes to start construction, the base of one household is 1, a hundred apartments to start construction, the base of 100, according to which the new housing starts (HousingStart) experts generally pay more attention to the construction of individual households, because In the United States, new housing starts are usually announced between the 16th and 19th of each month. Generally speaking, an increase in new housing starts and building permits is theoretically a positive factor for the countrys currency and will push the countrys currency stronger. If the actual result of the implementation of the revenue exceeds the expenditure, the fiscal surplus, expenditure exceeds the revenue, the fiscal deficit, there are many reasons why a country will have a fiscal deficit, some are to stimulate economic development and lower tax rates or increase government spending, some are because the government When a countrys fiscal deficit accumulates too high, it is like a company carrying too much debt, which is not a good thing for the countrys long-term economic development and a long-term negative for the countrys currency. If a countrys fiscal deficit increases, the countrys currency will fall; conversely, if the fiscal deficit shrinks, indicating that the countrys economy is good, the countrys currency will rise in the United States, the Treasury Department generally in the 17th government business day of each month will be announced last months federal government budget performance of the U.S. government has always been known for the fiscal deficit, the former President Clinton era deficit turned into a surplus, but after George W. Bush Jr. took office, coinciding with The current account is the main item on a countrys balance sheet, which records the outflow and inflow of funds between a country and foreign countries, including imports and exports of goods and services, investment income, income from other goods and services, and other factors. If the balance is positive (surplus), it means that the countrys net foreign wealth or net foreign investment has increased; if it is negative (deficit), it means that the countrys net foreign wealth or investment has decreased. 3. Investment income, which refers to the dividends or interest earned from the purchase of foreign stocks, bonds and other assets by nationals, plus interest and dividend payments from foreign loans or investments by foreigners in the country. In general, the so-called trade balance refers to the sum of the four items mentioned above. 5. lopsided transfers refer to cash or in-kind donations, relief, a countrys foreign aid and contributions to the funding of international institutions. In Western countries, the current account data is usually published monthly or quarterly, but the trade data of one month is not very useful for market reference, and the adjusted current account of each quarter is more important In the 70s and 80s, the current account deficit used to have a greater impact on the foreign exchange market, but now this influence has faded, but for the United States, the current account deficit still has a greater impact on the dollar Producer Price Index Interpretation Producer Price Index (ProducerPriceIndex), abbreviated as PPI, is mainly used to measure the price changes of various commodities at different stages of production, and consumer price index, as usually used as an important indicator to observe the level of inflation For the foreign exchange market, the market is more concerned about the monthly changes in the final product PPI due to food prices due to seasonal In order to more clearly reflect the overall commodity price changes, the changes in food and energy prices are generally excluded to form the core PPI, which further observes the trend of inflation rate changes in the U.S. The U.S. Bureau of Labor is responsible for collecting information on the U.S. PPI, and they collect information from major producers by means of questionnaires. In the U.S., the data is collected by the U.S. Bureau of Labor and they collect information from major producers by questionnaire, and the base month is the quotation of 2,300 commodities for each month including the 13th day of the week, and then weighted and converted into a percentile form, for comparison, the base period is set in 1967. And vice versa Capacity Utilization Interpretation Capacity Utilization (CapacityUtilization), also known as equipment utilization, is the ratio of total industrial output to production equipment, a simple understanding of how much of the actual production capacity in operation to play a productive role in the statistics, covering the scope of manufacturing, mining, utilities, durable goods, non-durable goods, base metals When the capacity utilization rate exceeds 95%, it means that the equipment utilization rate is close to the full capacity, and the inflationary pressure will rise rapidly as the capacity cannot cope. The market generally pays the most attention to the U.S. capacity utilization data. In the U.S., the data for the previous month is generally released in the middle of each month. In terms of definition, the order refers to the intention to buy, and is expected to immediately deliver or in the future delivery of goods transactions The statistics include, for example, heavy industrial products such as automobiles, aircraft and manufacturing capital goods, other items such as electrical appliances ordered statistics Because the statistics include the defense sector supplies and transportation sector supplies, these supplies are high-priced products, these two sectors data changes on the overall data In general, if the data increases, it means that the manufacturing sector has improved, which is good for the countrys currency. Conversely, if the data decreases, it means that the manufacturing sector has contracted, which is negative for the countrys currency. Hourly Earnings Interpretation Average Hourly Earnings (AverageHourlyEarnings) is a measure of the wages and salaries of workers in the private non-agricultural sector using average hourly and weekly earnings Hourly earnings data reflect changes in hourly base wage rates and reflect the growth of bonuses for overtime, average hourly earnings may earlier reflect the cost of wages and salaries in the industry Trends complement the Employment Cost Index and together provide a measure of total labor costs The index has some variability and limitations, but remains the headline news of the month on inflation, and the foreign exchange market focuses on changes in average hourly and weekly wages adjusted monthly and seasonally across years In general, if average hourly salaries are expected to cause an increase in interest rates, then hourly The rapid rise in wages will form a positive stimulus for the countrys currency and vice versa In the United States, the indicator is monitored by the Federal Reserve Board Purchasing Managers Index (PMI) Interpretation Purchasing Managers Index (PurchaseManagementIndex) is a measure of the manufacturing sector in terms of production, new orders, commodity prices, inventories, employees, order deliveries, new export orders and imports Purchasing managers index is expressed as a percentage, often 50% as a cut-off point for economic strength: that is, when the index is higher than 50%, is interpreted as a signal of economic expansion when the index is below 50%, especially very close to 40%, there are worries of economic depression it is a very important subsidiary pointer in the leading indicators, the market is more important to the U.S. purchasing managers index, it is the United States In addition to the overall index of concern, the purchasing managers index of prices paid and prices received is also regarded as a kind of price indicator The EmploymentReport, which includes employment-related information, is derived from two separate surveys, namely the Business Survey and the Household Survey. index; household survey provides information on the labor force, household employment and unemployment rate non-agricultural employment measures the number of people earning in all non-agricultural industries, such as manufacturing and services employment report is often touted as the crown jewel of all economic indicators that the foreign exchange market can respond to, it is the most sensitive monthly economic indicators of the market, investors can usually see numerous market-sensitive information from it. Among them, the foreign exchange market pays particular attention to the seasonally adjusted monthly changes in employment figures For example, strong non-farm payrolls indicate a healthy economic situation and may signal higher interest rates, while potentially high interest rates prompt the foreign exchange market to push the value of the countrys currency more, and vice versa IFO Climate Index Interpretation IFO Economic Climate Index ( IFOBusinessClimateIndex) is compiled by the German IFO research institute, as an important leading indicator to observe the state of the German economy IFO is the abbreviation of the German Institute for Economic Information registered association, founded in Munich in 1949, is a public interest, independent economic research institute, known as one of the German government think tank IFO economic climate index compilation The IFO Economic Sentiment Index is a monthly survey of various industrial sectors, including manufacturing, construction, and retail, covering more than 7,000 entrepreneurs per survey, and is compiled based on companies assessment of their current situation, as well as their short-term plans and views on the next six months. As the IFO economic sentiment index is published monthly and surveyed companies views on the future, and covers a wide range of sectors, so the reference of the economic trend forecast is higher ISM index interpretation ISM index is published by the U.S. Institute for Supply Management important data, to reflect the U.S. economic prosperity and the dollar trend have an important impact on the U.S. Institute for Supply Management (the InstituteeforSupplyManagement, ISM) is the worlds largest and most authoritative procurement The Institute for Supply Management (ISM) is the worlds largest and most authoritative professional organization in the field of purchasing management, supply management, logistics management, etc. The organization was founded in 1915, its predecessor is the American Purchasing Management Association, currently has more than 45,000 members, 179 chapters, is one of the most respected professional groups in the United States ISM index is divided into manufacturing index and non-manufacturing index two ISM Institute for Supply Management manufacturing index consists of a series of sub-indexes, of which the purchasing managers index is the most representative. This index is a barometer reflecting the comprehensive development of the manufacturing industry in terms of production, orders, prices, employees, deliveries, etc. Usually the threshold is 50, above 50 is considered to be the expansion of the manufacturing industry, below 50 means the contraction of the manufacturing industry, which affects the pace of economic growth ISM Supply Management Association Non-Manufacturing Index reflects the prosperity of non-manufacturing industry in the United States. When its value is continuously above the 50 level, it indicates that non-manufacturing activities are expanding and prices are rising, often indicating that the overall economy is in a state of expansion; conversely, when its value is continuously below the 50 level, it often indicates that the overall economy is in a state of contraction Auto Sales Interpretation Auto Sales is an important component of consumer spending. Auto sales are an important component of consumer spending and a good indicator of consumer confidence in the economic outlook. In addition, auto sales can also serve as an early signal of recessions and recoveries, and an increase in auto sales generally signals a turnaround in the countrys economy and an increase in consumers willingness to spend, which is good for the countrys currency and may be accompanied by an increase in the countrys interest rates, stimulating an increase in the countrys currency exchange rate. In Western countries, it is a very common phenomenon to take out loans for consumption, and the number of people applying to banks for loans can be quite high in the case of purchasing major goods, such as houses and cars, or major services, such as receiving a college education, thus creating a consumer credit balance. Generally speaking, an increase in consumer credit balances indicates an increase in consumer spending and optimism about the economy, which usually occurs in times of economic expansion, while a decrease in credit balances indicates a decrease in consumer spending and may be accompanied by pessimism about future economic activity. The Federal Reserve (TheFed) was established by an act of Congress in 1913. Before the Federal Reserve was established, the funding and credit activities of the U.S. economy were undertaken by a decentralized banking system. Each regional bank has its own board of directors, and each elects a representative to serve on the Federal Reserves Federal Advisory Board, which meets centrally in Washington four times a year; the Federal Open Market Committee is controlled by the regional banks; the Monetary Policy Committee, under the leadership of the Federal Reserve Chairman, makes monetary policy decisions Each month, the Federal Reserves Monetary Policy Committee will hold a monetary policy meeting to analyze news and other relevant economic information collected by the Federal Reserve Banks. and other relevant economic information to analyze and assess the current and future economic situation, and then decide what to use to match the economic growth or slow down the economic downturn, including the level of interest rate decisions due to the dominant position of the U.S. economy in the world, the Feds views and policies on the domestic and international economy are very important, and often have a greater impact on the foreign exchange market Japans short-range report interpretation Japans Short View Report, a quarterly survey of nearly 10,000 companies on future industrial trends, investigates companies confidence in the short-term economic outlook, as well as their views on current and future economic conditions and company earnings prospects Negative results indicate that more companies are pessimistic about the economic outlook than optimistic, while positive numbers indicate that more companies are optimistic about the economic outlook than pessimistic. The quarterly short-range corporate reports published by the Japanese government are highly representative and can accurately predict future economic trends in Japan, and therefore have considerable correlation with stock market and yen exchange rate fluctuations.