XM's Economic Calendar. Table of Contents
XM’s Economic Calendar and Forex Calculators
All traders of XM can benefit from the free trading tools.
There are many trading tools available for XM traders, and the most popular tools are the “Economic Calendar” and “Online Calculator”.
Both “Economic Calendar” and “Online Calculator” are available for free on XM Official Website.
XM’s Economic Calendar shows the list of upcoming economic and political events that can affect the markets.
XM’s Economic Calendar also shows the most likely affected currency, important to the markets, the forecasts and the previous numbers.
You can see XM’s Economic Calendar at anytime to stay updated and to perform fundamental analysis on the financial markets you are interested in.
In this page, we also show you how you can utilize XM’s Economic Calendar to follow the market trends.
Be aware of US Employment Statistics
The US Employment Statistics in other words, the statistics of the people who work, are major economic indicators that attract the most attention from investors around the world.
It will be announced on the first Friday of every month and will be announced by the Bureau of Labor Statistics of the US Department of Labor.
At this time of day, stocks, foreign exchange, bonds, commodities and investors all over the world would be focusing, and the market price will be sharp after the announcement.
In the United States, which boasts the world’s largest GDP, it is said that its personal income accounts for 70% of GDP, so the employment situation is one of the indicators of the world economy.
Therefore, basically, if a good result comes out, the stock price will rise significantly and the dollar will be bought.
If you get a bad result, the opposite happens.
In addition, there are speculations related to the advance forecast of employment statistics, so it will be a very volatile throughout the day.
Non-farm payrolls and Unemployment Rate
Many numbers are released in the employment statistics, but the most notable numbers are the number of non-farm payrolls and the unemployment rate.
The reason why this economic indicator draws the most attention is that the employment status is related to all personal consumption and corporate production activities, and is likely to be a political issue, so it is an important criterion for monetary policy.
Moreover, since the United States’ personal income accounts for 70% of GDP, it can be said that it represents the current economic situation more than the employment statistics of other countries.
The United States is the world’s largest economy, and as you know from the subprime shock and Lehman shock, it is clear that “when the United States catches a cold, the world catches a cold.”
As such, investors are sensitive to this indicator.
The Fed, which is the central bank of the United States, has called “forward guidance” since 2012, and has been using the unemployment rate as an indicator of monetary policy.
1. Non-farm Payroll
It is one of the most watched indicators along with the unemployment rate in employment statistics.
It gets more attention because it has a higher disparity rate from the forecast among the US indicators, and it is faster than the unemployment rate.
The people surveyed are those who belong to the non-agricultural sector, and are counted based on the payroll books of the establishment.
Excluding self-employed and agricultural workers, the number of business establishments is about 400,000 companies and the number of employees is about 47 million, which is said to cover about one-third of the United States’ GDP.
As such, it is the most important indicator in measuring the employment situation in the United States.
2. Unemployment rate
As the word implies, it is the percentage of people who are unemployed, divided by the labor force (total of unemployed and employed).
Approximately 60,000 households are surveyed, and the surveyor will collect data by telephone survey.
Due to the lagging index, the unemployment rate often falls in the month following the improvement in non-farm payrolls.
It is important to note that the employment statistics are the data submitted by the researcher and telephone calls to the household budget by the researcher during the period of about 2 weeks from the 1st to the 15th of the previous month (strictly including 14 days).
The US will announce the aggregated figures from the survey on the first Friday of the following month.
Since it will be the subject of the survey from 1 to 15 days, the data actually announced the following month will be an estimated value and will be a fixed value of about 50%.
Therefore, the “revised value” may often appear for the next two months.
The revised value was announced up to two months before the month, and in that case, the survey rate of 80% was taken in the employment data two months later.
The employment status, which is 90% of the survey rate, will be announced after three months.
How the market prices change with Fundamentals?
Although it is not limited to employment statistics, economic indicators basically consist of “previous value”, “expected value” and “result”.
The focus is on the gap between the “expected value” and the “result”.
The “estimated value” is published about 2 weeks to 10 days ago, but in the case of employment statistics, it is the median expected value of major financial institutions.
So if you have a bank that expects non-farm payrolls to grow by 100,000 and another bank that expects to increase by 200,000, it would increase by 150,000.
When the “expected value” becomes better than the “previous value”, investors will buy the country’s currency.
Therefore, even if a good result is actually obtained, it is already “weaved in”, a profit-taking sale is made, and the market price often drops after the announcement.
On the contrary, if the result is ridiculously better than the expected value, the market will be unable to incorporate the price and will rise further.
This is called a “positive surprise.”
On the contrary, when the result is worse than expected, it is called a “negative surprise”, and many market participants including investors who have been buying until then turn to sell at once, and the market price drops sharply.
In other words, the market moves big when unexpected results occur.
Know the Fundamental and Technical Analysis
Forex trading analysis includes fundamentals and technical analysis.
Even if you think about trading Forex, if you do not know how to predict and analyze whether the EUR/USD will rise or fall from now on, that would be difficult to start earning efficiently.
Here, we will explain the analysis methods necessary for Forex trading.
The main analysis methods are “fundamental analysis” and “technical analysis”.
1. Fundamental analysis
Fundamental means the foundation, and various elements that form the foundation of the economy such as GDP and policy interest rates are called fundamentals.
In the stock market as well, unlike the foreign exchange market, the market moves quickly by incorporating this fundamentals, so it is called fundamentals analysis to analyze the price movement from various economic information.
Specifically, it covers a wide range of events, including the monetary policy of central banks in each country, GDP, economic indicators such as the unemployment rate, and geopolitical risks.
Here are the main fundamentals related to the financial markets.
- Financial policy
- GDP
- Balance of trade
- Employment situation
- Inflation rate (CPI)
- Political issues and domestic situation
For example, the US economy is improving and the unemployment rate is decreasing.
Cars and luxury goods are selling well, and home sales are also strong.
The US stock price is likely to rise in the future, so the US dollar will rise.
With that in mind, we come to the conclusion that we buy the US dollar, and we can see the investment strategy.
2. Technical analysis
Technical analysis, in a nutshell, is an analysis method that predicts the future market price from price movements, and there are hundreds of methods.
It is fundamental to make a decision on selling or buying by using an index that performs various analyzes from price movements called a technical index, but a line is drawn on the chart, or an index of price movements for a certain period called a candlestick is used.
There are many popular ways to perform technical analysis.
- Trend line
- Moving average line
- Ichimoku Kinko Hyo
- MACD
For instance of moving average and trend lines.
The moving average line is a line that connects the average prices of the closing prices for the past days.
The trend line is an analysis method that connects the high and low prices of the chart or the high and low prices to find regular movements in the chart and use it as a reference for trading.
4 Main Reasons why Forex market price changes
Currency fluctuation factors are interest rate, economy, risk and stock price.
There are various fluctuation factors in foreign exchange, but keep in mind the main fluctuation “factors”, it will be easier to forecast the price movement if you pay attention to it
There are four main fluctuation factors of exchange rates: “interest rate”, “economy”, “risk”, and “stock price”.
Let’s look at each one in turn.
- Interest Rate
- Exchange rates are extremely sensitive to interest rates. After all, currencies with high interest rates are popular in developed countries, and investment funds gather from all over the world. In New Zealand, the rate hike started in 2014, and investors started buying the currency in the fall of 2013, when interest rate hikes were rising, and the price rose sharply.
- Economy
- After all, it is not possible to buy and sell currencies ignoring the economic situation of the country. Interest rates can be cited as a factor in fluctuations in foreign exchange rates, like South Africa and Turkey have extremely high interest rates of over 7%. Still, the reason why they are not bought is because the economy is unstable. In order to know the economic situation, it is necessary to look at economic indicators, but the most important ones are “employment statistics”, “GDP” and “trade balance”. In particular, the US employment statistics released on the first Friday of every month can be one of the indicators of the global economy.
- Risk
- There are various risks, but what can be a major factor in fluctuations in market prices is called “geopolitical risk.” This includes terrorism, wars, financial wobbles and natural disasters. Large market fluctuations occur because of the sudden occurrence of events that most market participants cannot predict in advance. Specific examples include the Greek crisis and the instability in Ukraine. In such a case, there is a characteristic that the opposite currency is likely to rise.
- Stock price
- The stock price can be an indicator of the economic situation in that country. Therefore, currencies have some correlation with exchange rates. The European stock market is basically linked to the currency, but the US stock market is also linked to the US market due to monetary policy pushing up stock prices as of 2014.
XM is also running various bonus promotions and trading contests for traders.
Go to the page here to see the list of all Forex bonus promotions run by XM.
Please check XM official website or contact the customer support with regard to the latest information and more accurate details.
XM official website is here.
Please click "Introduction of XM", if you want to know the details and the company information of XM.
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Comment by Diletta
March 26, 2024
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