Economic Releases: PT 2

The forecast of economic announcements is accomplished in 2 forms: Money Supply and Interest rates or the Import Price. Not only does the Import price presage all economic announcements within a 3 and 6 week period but if the Import Price is extremely high then CPI, GDP and Producer Prices is known for a longer time frame.

The Import Price serves its purpose by an early warning to future economic releases. Import Prices for all nations in 2019 was extremely low particularly the United States. CPI was low, GDP and Producer Prices were high and market prices operated correctly.

By 2020, Import prices and CPI skyrocketed, GDP and Producer Prices dropped precipitously. The money supply Vs Interest rate data would’ve revealed the same scenario as interest rates were to low and money supply to high. As money supplies and interest rates share an opposite relationship, Interest rates skyrocketed while the money supply, particularly M2 dropped.

The question to economic releases is the order to announcements. The RBA leads the current 3 week cycle with Inflation just as occurred July 26. Next important releases within days should be Imports and Exports GDP and Producer Prices and the remaining minor announcements will be known in advance.

The FED led the last 3 week cycle July 26 by GDP and 1 day after the ECB meeting while the ECB reported Inflation. The FED and ECB releases remain reported as the same economic announcements on the same day to hold the cycle constant. The ECB reported GDP 1 day after the FED to again hold the cycle on a continuum.

The ECB’s Import price was next to release yet the point of note is not to discharge Imports and exports together as one announcement. While the Import price is most vital, the Export price alongside imports completes the equation to view the entire economic analysis. Most nations report Imports and exports together.

The ECB releases Export prices 1 or 2 days after imports while the Fed Releases imports and exports 2 weeks late to the 3 week cycle. By the time the FED releases Imports and exports, all nations reported the big 4 announcements as Inflation, GDP, Imports and Exports and Producer Prices. By the late release, the Fed is warning to how nations will report the Big 4 releases at the start of the next 3 week cycle.

By the ECB’s releases to the Big 4 announcements quickly and early, no significant announcements exist to trade upon. By the first 1 and 2 weeks into the cycle, all nations reported the most vital economics.

The conclusion is the 3 week cycle is constant as each nation releases most vital economics early and on the same dates. The ECB and Fed Announcements as first to report lead all nations however submitted is all nations report the same up or down to economics based on the United States.

The myths and realities to the 3 week cycle is legendary. Month end rebalancing should re balance 2 weeks into the month as all economic releases are done. A trader doesn’t care if Inflation rose or fell by services or goods nor to rents and whatever else is ascribed to CPI. The market price to the traded good will perform the same operation and for profit.

Ask this question. What are the armchair economists selling today. The Money show in February had 40 booths and 38 of the 40 were those selling Economics. Seems the trading world must be just as skeptical to armchair economists as the trade services.

Up or down to economic releases is all that matters and only to the big 4. Drilling deep into the weeds to economic announcements is pablum information as it not only doesn’t profit but the information fails to view the entire economic analysis. This is like trying to find a Star in a giant constellation of 1 billion stars. The star won’t be found and if found, its to late.

Brian Twomey

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