TradeSense: Economic Indicators, 20 August
This page is updated daily with information that can help expand your knowledge of CFDs and add to your trading armoury.
Here we cover details of some of the more important economic reports of the day, including when they are released (times shown are the local time for the relevant economic area), what they mean and how they may affect the financial markets.
Visit us daily for the latest posting from the TradeSense databank (the complete databank resides in the client area of our website and contains a full full list of reports for every economic indicator that we cover).
Japan - All Industry Activity Index (MoM) (June)
Released by: Ministry of Economy, Trade and Industry (monthly)
Time: 08:50 (JST)
What is it?
The all industry activity index is an indicative measure of the monthly change in production by all sectors of the Japanese economy.
Why is it important?
The index is comprised of the service, manufacturing, construction and public sectors, and provides an insight into levels of Japanese economic expansion by tracking GDP and growth figures for the country. A high reading is considered bullish for the JPY, whereas a low reading is seen as bearish. The figure represents the percentage change from the previous month.
What are market expectations?
A survey of analysts conducted by Bloomberg predicted a figure of -0.9%. This is compared to a previous figure of 0.4%.
Japan - BoJ monthly report 14:00 (JST)
Japan- Convenience Store Sales(YoY)(July)
Released by: The Japan Franchise Association (Monthly)
Time: 16:00 (JST)
What is it?
It is a monthly survey of the value of sales from small convenience stores.
Why is it important?
As Japan has one of the highest convenience store per capita rates, a large percentage of consumer income is spent at these stores. Although the Japanese are very reliant on exports to sustain their economy, consumption of domestic goods for everyday necessities is still vey important.
A high figure suggests rising inflation and will impact the economy.
UK- Public Sector Net Borrowing (July)
Released by: Office for National Statistics (monthly)
Time: 9.30 (BST)
What is it?
It is the amount of debt owed by governments in the UK.
Why is it important?
It is crucial for the public sector account to stay balanced in order to maintain a sustainable economy. If the UK is in deficit from spending more than it earns, it must increase its net borrowing.
A lower figure is positive for the pound and means that the UK is able to lend money.
What is expected?
A Bloomberg survey of analysts predicted a figure of -£4.3 billion from £9.2 billion previously.
UK - Bank of England Minutes
Released by: The Bank of England (monthly)
Time: 09.30 (BST)
What is it?
The Bank of England publishes the minutes of its interest rate decision meeting.
Why is it important?
These notes give an insight into the MPC decision making process and the BoE’s opinion on economic developments inside and outside the UK.
The minutes generally indicate the direction of future interest rate changes which is what markets will tend to focus on in particular.
The minutes come out two weeks after the interest rate decision, therefore some of the information tends to be discounted. However, investors tend to focus on the tone of the meeting to gauge the outlook for inflation.
When the Bank is cautious toward the outlook of the economy a rate increase is usually anticipated. If the Bank is optimistic, it suggests that inflation is steady and that a rate increase is less probable.
UK- M4 Money Supply (July)
Released by: Bank of England (monthly report)
Time: 9.30 (BST)
What is it?
It is a measure of all currency in circulation including notes and coins and money held in bank accounts. It is also referred to as 'Broad Money.'
Why is it important?
It is an important inflationary indicator, as the exchange rate is affected by monetary expansion.
What is expected?
A Bloomberg survey of analysts predict 0.5% from a previous 1.8% month-on-month. The year-on-year figure came in at 10.7% from a previous 11.4%.
Eurozone - Construction Output
Released by: Eurostat (quarterly)
Time: 11.00 (CET)
What is it?
A measure of the output and activity of the construction industry, for both the public and private sectors.
Why is it important?
A high figure, indicating high levels of construction in the euro area, implies a growing economy: businesses are not going to invest in the expense of construction unless the funds are available and they are optimistic about the returns on such investment.
Because levels of construction are so closely tied to changes in economic growth, the index is frequently used as an indicator of the business cycle.
UK - CBI Industrial Trends Survey (MoM)(August)
Released by: CBI (quarterly)
Time: 11.00 (BST)
What is it?
A survey of senior manufacturing executives on trends in output, prices, exports, and costs.
Unlike many other economic surveys, it concentrates purely on the views of those surveyed rather than measuring quantitative data.
Why is it important?
The impact of this report on financial markets is slight, but nevertheless, it does provide some interesting information regarding current business confidence, capacity utilisation and the investment intentions of manufacturing executives.
Australia- Westpac Leading Index (MoM)(June)
Released by: Melbourne Institute
Time: 10.30 (EST)
What is it?
It is an index which tracks nine gauges of economic activity which include share prices and telephone installations.
Why is it important?
It is an indicator of economic performance and can impact the volatility of the Australian dollar. A high reading is seen as bullish whereas a low reading is seen as bearish.
US- EIA Crude Oil Stocks (August 16)
Released by: The Energy Information Administration (weekly report)
Time: 10.30 (EST)
What is it?
A measure of inventories of crude oil in the US (whether produced domestically or abroad) stored for future use.
Why is it important?
A decrease in inventories can point toward a low oil supply, which puts pressure on oil prices to rise. High inventories may push oil prices down in times of low demand, or maintain prices even in times of high demand.
Crude oil is a very important commodity globally. As oil prices have a direct impact on the US economy, any increase in the price of oil will act as an inflationary pressure. Historically, US consumer prices have shown a strong correlation with oil prices.