Key economic indicators
8 min readLesson 25
The releases that move markets most and what each one measures.
Fundamental analysis asks what an economy, and therefore its currency, stock index or bond market, is worth. Traders apply it mostly through scheduled economic releases.
The indicators that matter most
| Indicator | What it measures | Why traders care |
|---|---|---|
| Interest rate decision | The central bank's policy rate | The most powerful driver of currencies |
| CPI (consumer price index) | Inflation in consumer prices | Shapes expectations for interest rates |
| Non-farm payrolls (US) | Jobs added outside farming | The headline gauge of US labour strength |
| Unemployment rate | Share of the workforce without a job | Slack in the economy |
| GDP | Total output of the economy | Overall growth, published quarterly |
| PMI | Survey of purchasing managers | An early read on activity; above 50 means expansion |
| Retail sales | Consumer spending in shops | Consumption drives most developed economies |
Leading and lagging
- Leading indicators move before the economy does: PMIs, new orders, consumer confidence.
- Lagging indicators confirm what already happened: unemployment, GDP.
Markets react most to leading data and to anything that changes expectations for interest rates.
Actual versus forecast
Every release has a consensus forecast. Prices already reflect it before the number is published. What moves the market is the surprise, the gap between actual and forecast, and any revision to the previous figure.
A practical routine
- Each Monday, check the week's high-impact events on the economic calendar.
- Note which instruments they affect.
- Decide in advance whether you will be flat, reduce size or trade the reaction.
- On funded Standard accounts, remember that orders are paused around restricted releases.
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