Within a 3 month trade period, central banks meet twice or every 6 weeks and economic announcements are released twice as every 6 weeks. The speculation is this arrangement began in year 2000 when central banks began a schedule of meetings every 6 weeks yet markets maintain consistency to the 3 month T bill cycle introduced in 1928.
The United States is the 6 week leader and first to release economic announcements by NFP, GDP, CPI, Producer Prices, Imports and Exports. Remaining nations to all releases follow the United States economic announcements 1 to 2 weeks later. Within the first 2 and 3 weeks of NFP, all economic releases are complete.
The focus then becomes a continuation to the next 3 weeks of economic announcements to begin with the United States release of NFP. Then all nations again follow with the same economic releases 1 to 2 weeks later. What is commonly known as quarterly releases are actually monthly disclosures by central banks however each central bank is different to economic data presentations.
After the 2nd round of 3 week economic releases then the Federal Reserve and Powell report interest rates and economic policy. All nation’s central banks then report and follow the Fed and Powell.
The United States is not only the leader to economic announcements but the United States sets the standard by insights to releases for all nations. The argument is whatever the United States reports, all nations will disclose the same results on an up and down basis.
By sets the standard, United States GDP was the first release after the Fed. United States GDP is actually the most important economic data because all nations calculate imports and exports to United States GDP. And GDP is the insight to all expected announcements once released. The ripple effects to GDP is astounding.
The driving force to market prices is the relationship: GDP, Imports and Exports.
GDP for the United States reported higher levels then Japan, UK, Canada and Europe also revealed higher GDP levels. United States Inflation reported higher levels while Japan, China and Canada also recorded higher levels. UK Inflation to Core and yearly also rose. Europe recorded no change yet remained higher.
Producer Prices recorded higher rates for the United States and Japan while Europe, UK, New Zealand and Australia reported lower. Imports and Exports naturally follow Producer Prices.
The United States disclosed Imports and Exports up from month to month. Europe Imports recorded down and Exports up while Australia reported Imports and Exports down. New Zealand has yet to report but from previous data reviewed, Imports and Exports will communicate both down.
The vast majority of economic releases are categorized into Inflation, GDP, Producer Prices, Imports and Exports. Most vital to every announcement is the Goods side due to the effects to Commodity prices and the exchange rate level, particularly to the Effective Exchange rate index.
Every central bank calculates exchange rates to CPI, GDP, Producer Prices and Imports and Exports. GDP and Oil are most vital to imports and exports and to the exchange rate level.
Economic releases are related. If Imports reports higher levels then Producer Prices delineates lower and higher for Industrial Production.
Industrial Production is not required to focus as a release because its seen inside the big 4 points of announcements as GDP and Imports and Exports. GDP answers the demand side to an economy for products and necessities.
If exports are higher, GDP reports higher and lower for Inflation. Both GDP and Inflation reported higher levels. Both are opposite indicators and must travel separately.. Why both reported higher is either due from a correction from oversold / overbought or as a result of the mis match nation to nation from Imports and Exports.
Outside of the big releases to GDP, Inflation, Imports and Exports, the vast majority of economic announcements are not required to focus as they don’t move markets and because all announcements are found inside the big 4. As examples, Wages and Employment, Manufacturing Index, Consumption, Wholesale Prices, Housing, Labor, Services, Foreign Investments.
Terms of Trade for example divides Exports to Imports and not required attention. The ancillary releases are duplicates and further insights to the Big 4 economics.
The current mismatch to Imports and exports should be the driving focus over next releases as Import and Exports move market prices.
Brian Twomey
Tianzuida ON TRADING 