What is Macroeconomic data?
Macroeconomic Data is basically opinions, analysis and statistics that aid in the evaluation of a specified economy and helps to provide useful information on general economic conditions. This various data is usually released by statistical companies or intergovernmental organisations on a daily, weekly, monthly, quarterly and/or yearly basis.
Here are some of the common and vital economic indicators which you should be aware of as they could greatly help you to make more prudent investment decisions, both over short and longer-term time frames.
1. Interest Rates
There are several Interest Rates out there, but the most important is called the base rate which determines the rate at which commercial banks borrow money from central banks, and it is therefore seen as a benchmark for other Interest Rates. This is the rate most often quoted when discussing the Interest Rates of a specific country e.g. the U.S.
2. Employment Data
Employment Data includes several indicators which intend to measure the prevalence of employment or unemployment. The most important statistics are unemployment rates, such as the non-farm payroll (N.F.P.) which is the most widely-watched U.S. data release.
GDP or Gross Domestic Product represents the total value of services and goods produced over a specific period within a country. You can also see GDP data as a comparison to the previous time periods. GDP is a key measure of how well a country, (or group of countries), is performing.
There are many indicators of Inflation, but perhaps the most well-known is the Consumer Price Index (CPI) which measures changes over time of the prices of consumer goods and services acquired by households.
5. Retail Sales
Retail Sales data measures the sales of a specified economy’s retail sector which covers the ‘consumer durables’ and ‘nondurables’. Retail Sales helps to determine the actual domestic demand within a country and is closely watched.
6. Other Sectoral Data
Sectoral Data can show the productivity of different sectors such as manufacturing, industry or construction. It is essential, as the performance of an economy depends on several sectors’ output.
7. Balance of Trade
Balance of Trade is basically the difference between the exports and imports of goods, showing either a trade surplus (more money coming into the country) or a trade deficit (more money going out of the country).
It is important to highlight that you can expect more volatility in the respective markets after (or sometimes even before) the release of these indicators. However, keep in mind that other events can also cause high market movements and data releases are only a part of the overall trading landscape. And of course, there are many more parts of an economic picture than just those outlined above - you may even be an expert on a particular sector yourself. Anything that gives you an edge is what you should look for!