Economic Calendar

A type of platform used to follow economic events, dates, and data releases that are influential to changes in security prices or capital markets as a whole

Author: Laila Al-Eisawi
Laila Al-Eisawi
Laila Al-Eisawi
I completed my Bachelor of Arts in Economics at New York University Abu Dhabi where I got the opportunity to explore various courses within Economic Growth, Development, Behavioral, and other areas with applications to the real world. My course experience and internships have helped me grow and develop my presentation and writing, analytical,
Reviewed By: Josh Pupkin
Josh Pupkin
Josh Pupkin
Private Equity | Investment Banking

Josh has extensive experience private equity, business development, and investment banking. Josh started his career working as an investment banking analyst for Barclays before transitioning to a private equity role Neuberger Berman. Currently, Josh is an Associate in the Strategic Finance Group of Accordion Partners, a management consulting firm which advises on, executes, and implements value creation initiatives and 100 day plans for Private Equity-backed companies and their financial sponsors.

Josh graduated Magna Cum Laude from the University of Maryland, College Park with a Bachelor of Science in Finance and is currently an MBA candidate at Duke University Fuqua School of Business with a concentration in Corporate Strategy.

Last Updated:February 13, 2024

What Is the Economic Calendar?

An economic calendar is a platform to follow economic events, dates, and data releases that may influence security prices or capital market changes. 

Investors use these calendars to study economic indicators and data. They use various charts to find for trends or patterns related to economic events.

These patterns can change the market sentiment and inflict volatility. Investors alter their planned trades in response to these perceived patterns. 

Economic charts are usually depicted with a year's days, weeks, and months. An individual can choose the country or currency and particular date to observe a list of potentially market-moving events displayed in chronological order. 

Most events fall into two categories: reports on previous financial or economic events and predictions of future ones. 

The timings of the events and data releases may differ by country and region. For example, most events happen monthly, some occur quarterly, and others are reported weekly.

The economic calendar for the foreign exchange market (forex), is similar to the one for stocks. In addition to important events and reports, it  includes events in the countries of the pairs being traded, and monetary and fiscal policy decisions can influence it. 

Economic calendars hold reliable and accurate information that is beneficial and important, because they give investors:

  • Access to macroeconomic data
  • Tracking of economic health 
  • Fundamental analysis necessary to trading in Forex
  • Opportunity to observe the countries of the currencies one aims to trade
  • Chance to avoid harmful surprises through knowledge of data volatility

Key Takeaways

  • Investors use an economic calendar to watch how economic events and reports of indicators influence markets.
  • Investors can use economic calendars to look at policy decisions' announcements or indicator changes. They can then see how these reports impact economic performance and projections about the future.
  • Investors can filter the data to specify the country or currency, level of importance, and dates.

Understanding the Economic Calendar and Economic Indicators

Economic indicators carry significant figures and pieces of information displayed on economic calendars. As a result, investors can examine the financial performance of an area and make predictions based on the data presented.

As further explained below, examples of indicators shown include interest rates, inflation data, unemployment, and gross domestic product

Interest Rates

  • If interest rates start to increase, then holding cash becomes more attractive. 
  • After a central bank's announcement, there is some commentary around expert forecasts predicting what the economic environment will look like. 
    • Provides insight into the perspectives of the Federal Reserve in the US or other central banks on the state of their economy 

Inflation Data 

  • It includes indexes like the Consumer Price Index (CPI), which measures the cost of living. 
  • As inflation increases, it impacts a central bank's interest rate policy. 
    • Adjust interest rate to counter inflation

Unemployment

  • Non-farm payrolls are a measure used to highlight monthly US employment data. It expresses the number of jobs added or lost in the economy in the previous month. 
    • Data on what affects the US economy is also essential to the global economy, as the US is a leading global trader.  

Gross Domestic Product (GDP)

  • The critical value to study here is growth, as represented by a percentage and typically reported quarterly or annually. 
  • Studying such data reflects how well the economy is doing and patterns around whether the economy has been growing or slowing down. 

Below is a quick YouTube video explaining the terms used in economic calendars:

The significance of studying economic calendar terms lies partly in the absolute number but also in how it differs from market expectations. After these announcements are made, there can be short-term volatility in markets such as currencies and stocks, and also in commodities such as gold and oil. 

Using the Economic Calendar

It facilitates studying economic events and indicators that affect markets in various economies. Thus, users can get a heads-up about what the markets expect in the coming days, weeks, and months. 

Data is displayed in chronological order with a countdown and automatically refreshed when new data is released. In addition, individuals can enable notifications to be aware of new releases on a timely basis. 

The platform distinguishes different events impacting an economy according to their importance and the potential effect they may have on a market. 

  • Flagged red and long data are expected to have a significant probability of moving the market. 
  • Yellow and short reflect a low probability of the data driving the market. 
  • Orange signifies a medium level between the two. 

Individuals can filter the data on this calendar to make it easier to spot essential pieces of information. They can choose what countries or currencies to look at and filter out the unimportant data and noise.

There is also an option to receive more information about the data under observation beyond what is shown immediately. This can be accessed by clicking on the name of the respective event. 

Many economic calendars are free on finance or market-related websites, and they all provide the same data regardless of which one you use. Some examples are:

Researched and authored by Laila Al-Eisawi LinkedIn

Reviewed and edited by James Fazeli-Sinaki | LinkedIn

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