Fundamental Analysis (Part 4)

Primary Jobless Claims

‍

What it is: This indicator shows the number of people who filed for unemployment benefits last month.

‍

‍Why it should be followed: Fewer new claims indicate a stronger economy and a more stable job market. Higher employment usually leads to increased consumer spending and better GDP figures. Therefore, if the actual number of jobless claims is lower than expected, the USDJPY price tends to drop.

‍

‍When data is published: Weekly, every Thursday.

Interest Rate Decision

‍

What it is: Central banks set the interest rate at which they lend money to national commercial banks. This rate influences how attractive it is for foreign investors to invest in the country’s currency.

‍

Why it should be followed: The interest rate decision reflects changes in the economy and indicates the strength and appeal of the national currency (for example, the USD for the United States).

‍

When data is published: Quarterly, by the eight major central banks (US Federal Reserve, European Central Bank, Bank of England, Bank of Japan, Swiss National Bank, Reserve Bank of Australia, and Reserve Bank of New Zealand).

Money Supply

‍

What it is: Money Supply measures the total amount of money currently available for spending in a country’s economy.

‍

‍Why it should be followed: This is a leading indicator that helps investors predict future inflation and anticipate Central Bank policy changes. A higher money supply can signal economic confidence, which often supports the strength of the national currency.

‍

‍When data is published: In the United States – every Thursday.

Nonfarm Payrolls (NFP)

‍

What it is: This key report shows the number of new jobs created in the U.S., excluding the agricultural sector. The data is categorized by industry and reflects overall employment trends.

‍

‍Why it should be followed: A rise in employment suggests business growth and stronger consumer spending, which supports economic expansion. The report also includes average wages and hours worked, both of which can influence interest rate expectations. Better-than-expected NFP data often strengthens the U.S. dollar, pushing the EURUSD chart downward.

‍

‍When data is published: On the first Friday of each month.

Personal Income

‍

What it is: This indicator measures the total income received by all citizens in a country, including wages, interest, dividends, and annuities.

‍

‍Why it should be followed: As a coincident indicator, it reflects the current state of consumer demand. Higher personal income means people have more money to spend, which boosts economic activity. When personal income increases, it's usually a positive signal for the economy and the national currency.

‍

‍When data is published: Monthly, after the 20th.

Producer Price Index (PPI)

‍

What it is: This indicator measures the changes in prices that domestic producers receive for their goods and services. It covers all internal production, excluding imports.

‍

Why it should be followed: PPI is a leading indicator of inflation. Rising producer costs often result in higher consumer prices. If production becomes more expensive, the cost of living may increase, potentially prompting changes in economic policy. Traders watch PPI to anticipate inflation trends and interest rate decisions.

‍

When data is published: Monthly, during the week following the Nonfarm Payrolls report.

Retail Sales

‍

What it is: This indicator tracks the monthly changes in the total value of retail goods sold, including items like food, clothing, and vehicles.

‍

‍Why it should be followed: As a leading indicator, retail sales reflect consumer spending habits. A strong rise in retail sales signals economic growth, increases the risk of inflation, and may prompt action from the Central Bank. On the other hand, a decline in sales can suggest weakening demand and a potential recession.

‍

‍When data is published: On the 13th of each month.

Trade Balance

‍

What it is: This indicator shows the difference between a country's exports and imports. A positive trade balance occurs when export value exceeds import value. Conversely, when imports are greater than exports, it results in a trade deficit.

‍

Why it should be followed: Trade Balance is a lagging indicator that reflects the overall economic health of a country. A large trade deficit can lead to increased national debt, which may weaken the value of the country’s currency.

When data is published: On the 19th of each month.

Unemployment Rate

‍

What it is: This indicator shows the percentage of people who are unemployed but actively seeking work. It is calculated by dividing the number of unemployed individuals by the total labor force, excluding groups like retirees and children.

‍

‍Why it should be followed: As a lagging indicator, it reflects the health of the labor market and overall economy. High unemployment usually leads to reduced consumer spending, lower GDP, and a higher risk of recession. Conversely, low unemployment suggests economic growth and stability.

‍

‍When data is published: On the first Thursday of each month, alongside the Nonfarm Payrolls (NFP) report.