An economic calendar shows the planned publication dates of data relating to the economy that have a big influence on the financial markets. The stock markets are a news-driven supply and demand engine; as a result, changes in price are influenced by the announcement of important news or economic events. The economic calendar is used by many traders and investors to carefully manage their trades and portfolio balancing. Economic calendars may be found online for free or on many different databases, such as the Minipip Economic Calendar.

Understanding the economic calendar

Economic calendars often concentrate on the forthcoming economic report schedules for a particular nation. Weekly jobless claims, reports of existing home sales, scheduled interest rate changes or interest rate signalling, regular reports from the Federal Reserve or other central banks, economic attitude surveys from particular markets, and several others are examples of events that might appear on an economic calendar.

A trader who intends to take a short position may find it mainly advantageous to follow the economic calendar. If the trader predicts the statement's nature accurately, they can place a position just before the planned announcement and terminate it within a few hours.

Indicators that lag

A lagging indicator is a measurable economic variable that moves and changes direction after the target variable has changed (economic cycle). Lagging indicators are utilised by investors, companies, and governmental bodies as signs for their plans and operations. They are used to determine the trend of the general economy.

Examples of such indicators include Corporate Earnings, Interest Rates, Consumer Price Index (CPI) and Unemployment Rate.

Advancing indicators

An advancing indicator is a measurable economic variable that alters its course and movement prior to the target variable also changing (economic cycle).

Advancing indicators are used to forecast when the economic cycle will shift as well as other important changes to the economy. Investors, companies, and governments utilise leading indicators to plan their plans and operations even if they are not always reliable.

Examples of such indicators include Retail Sales, Jobless Claims, Yield Curve and Purchasing Manager’s Index (PMI).

Economic Calendar Differences

The majority of nations have their own economic calendars and timetables for economic release dates. The economic calendars are freely accessible on a number of financial websites, however, the information and dates on each site may differ.

As the U.S. has such a sizable and significant economy, the majority of industry participants focus their attention on it. Significant national economic events frequently have a substantial effect on all global markets. This is because the United States has the biggest economy in the world. Due to the U.S. dollar's significance as the benchmark reserve currency for all nations, it also plays a crucial role in the global economy.

How often are the economic indicators released?

The majority of the economic indicators are reported monthly. For example, PMIs are reported monthly. An example of a longer period of time is the Federal Reserve, which meets once every two months.

(CFI.com, Investopedia.com)