Financial Events | Economic Indicators

A handy guide to keep you attuned to the major economic indicators that are scheduled for release in the UK, US, eurozone, Australia and Japan today. Increase your awareness without wasting time reading hefty economic reports.

Updated daily, this page offers information on which key economic indicators you should keep an eye out for, when they will be released (London time), and how they are likely to affect the markets.

Sign up for our free six-week TradeSense educational programme to access our complete databank of economic indicators. The databank resides in the client area of our website and contains a full list of reports for every economic indicator covered by us.

Australia - Trade Balance (July)

Released by: Australian Bureau of Statistics (monthly report)

Time: 02.30

What is it?

The Trade Balance measures the value of exports of goods and services out of Australia minus the value of and imports to Australia.

A positive Trade Balance (a trade surplus) indicates that exports outweigh imports. A negative Trade Balance (a trade deficit) indicates that exports are exceeded by imports.

The headline figure is reported in billions of dollars.

Why is it important?

The Trade Balance is one of the biggest components of Australia's Balance of Payment, which can play a significant role in the value of the Australian dollar.

Trade deficits usually reflect money creeping out of the Australian economy and may lead to a depreciation of the dollar. Release of this report can lead to volatility in AUD exchange rates.

What are market expectations?

Economists surveyed by Bloomberg yielded a median forecast of 3.1 billion. The figure reported last month showed a figure of 3.539 million.

UK - Nationwide House Prices (Aug)

Released by: Nationwide Building Society(monthly)

Time: 07.00

What is it?

A report that uses mortgage data in order to measure the level of house prices for the month in question.

Why is it important?

House prices give a simple, useful indication of the strength of the housing market, which is a linchpin of the UK economy.

House prices tends to have a knock-on effect on consumer prices generally and therefore plays a part in inflationary issues.

What can we expect?

A month-on-month change of -0.3% (compared with -0.5% last month) and a year-on-year change of 4.9% (compared with last month's figure of 6.6%) are the figures predicted by Bloomberg polls.

UK - PMI Construction (Aug)

Released by: Chartered Institute of Purchasing and Supply and NTC Research

Time: 9.30

What is it?

A measure of activity in the construction industry.

The index is compiled from the opinions of executives in the construction sector, who are asked to indicate their views on future demand, the current state of the sector, including levels of purchasing.

The index has a value between 1-100, with higher values indicating increased purchasing and positive comments.

Why is it important?

Higher values indicate that the construction sector is strong, which is an important part of the economy as a whole. Variations in the figure therefore tend to match changes in the business cycle and can reflect growth or decline in the overall economy.

What are market expectations?

Economists polled by Bloomberg gave a median forecast of 53.2, compared with last month's index level of 54.1.

Eurozone - GDP (2Q)

Released by:Eurostat (quarterly)

Time: 10.00

What is it?

Gross Domestic Product (GDP) is the broadest overall benchmark of economic activity and quantifies the production of goods and services within the euro area.

It is calculated by adding up all expenditures on all final goods and services produced during the year as shown:

GDP = C + I + G + (X - M)

Where:
C = Consumption
I = Investment
G = Government expenditure
(X-M) = Net exports (exports minus imports)

The headline figure is the annualized percentage change.

Why is it important?

An increasing GDP indicates an improving economy, which is generally good for the euro and for the financial markets. Extremely robust economic expansion can create inflationary concerns which may contribute to tightening of monetary policy.

Most of the components that comprise the report are known well in advance, meaning that GDP tends to be well anticipated. If, however, the figure does differ from expectations, it does have the potential to cause significant market movement.

What can we expect?

Economists polled by Bloomberg gave a median prediction of 1.7% year-on-year, which is the same change as the previous release. A similar survey forecasts a quarter-on-quarter change of 1.0%, which would be unchanged from the previous release.

Eurozone - Household Consumption (2Q)

Released by:Eurostat (quarterly)

Time: 10.00

What is it?

The mean expenditure on individual consumption of goods and services over the period.

Why is it important?

If household consumption is increasing, it points towards economic growth and strong consumer confidence, which are generally positive for the economy. If consumption is too high, however, it can cause prices to rise (inflation).

What are market expectations?

A Bloomberg survey gives a consensus of 0.2% for the quarter, from -0.1% the last quarter.

Eurozone - Producer Price Index (July)

Released by: Eurostat (monthly report)

Time: 10.00

What is it?

The PPI is a basket that reflects the prices being paid by producers throughout the euro area in all stages of processing (crude materials, intermediate materials, and finished goods).

The headline number is expressed as a month-on-month or annualised percentage change.

What are market expectations?

A survey of analysts compiled by Bloomberg shows a predicted month-on-month change of 0.3%, unchanged from last month's release. The same survey gave a median forecast of 4.0% year-on-year (the previous month's annualised rate was 3.0%).

Eurozone – ECB Rate Announcement

Released by: The European Central Bank (monthly meeting)

Time: 12.45

What is it?

This is an announcement of any change in monetary policy following the first meeting of the month by the European Central Bank (ECB) Governing Council (the Governing Council meets twice a month). Unlike the Bank of England, the ECB does not publish any minutes of the meeting. Instead, the President and Vice-president hold a press conference 45 minutes after the announcement, which begins with a statement by the President which is then followed by a question and answer session. The ECB has a stated aim to keep inflation below (but close to) 2% in an effort to maintain price stability.

Why is it important?

The Governing Council comprises presidents of Central Banks representing the most powerful economies in Europe and they implement their monetary policy by setting three key rates for the euro area, which are:

• The interest rate on the main refinancing operations (MRO), which provide the bulk of liquidity to the banking system.
• The rate on the deposit facility, which banks may use to make overnight deposits with the Eurosystem.
• The rate on the marginal lending facility, which offers overnight credit to banks from the Eurosystem.

These key interest rates bear a strong influence on all other rates in the euro area.

High rates may serve to hinder economic growth (for example, by making it more expensive for businesses to accommodate their debt-loads) but may help to combat inflationary pressures (higher rates tends to curb consumer spending). Low rates, meanwhile, should stimulate the economy, but can lead to spiralling inflation.

If the ECB’s decision is unexpected it can have a potent effect on European financial markets.

What are market expectations?

Analysts surveyed by Bloomberg predict that the ECB will keep the base rate unchanged at 1.0%.

U.S.- Nonfarm Productivity (Q2)

Released by: Bureau of Labor Statistics of the US Department of Labor

Time: 13.30

What is it?

The figure shows labour output excluding the farming sector, on a hourly basis.

Why is it important?

A high reading is desirable as it shows a healthy business sector which bears an influence on the country's GDP.

What can we expect?

Based on a Bloomberg survey of economists, Nonfarm Productivity is expected at -1.9%. This is in comparison to the previous change, which was -0.9%.

U.S.- Unit Labour Costs (Q2)

Released by: Bureau of Labor Statistics, Department of Labor

Time: 13.30

What is it?

It shows the total cost of employing a labour force.

Why is it important?

The figure also gives an indication of trends in inflation, share prices, and the cost of production.If labor costs rise, consumers tend to bear the brunt through rising inflation.

What can we expect?

Based on a Bloomberg survey of economists, the median estimate was 1.2%, from the previous months figure of 0.2%.

U.S. - Initial and Continuing Jobless Claims

Released by: US Department of Labor (weekly)

Time: 13.30

What is it?

This is a simple measure of the job market in the US. Initial jobless claims reports the numbers of individuals who are signing on for unemployment insurance for the first time.

Continuing Jobless Claims measure the number of individuals who are unemployed and are currently receiving unemployment benefits.

Therefore, a rising movement in the number indicates a weakening labour market and a downward movement in the figure indicates a stronger job market.

Why is it important?

Generally speaking, a strong labour market should have a positive influence on the economy, as it implies increased household spending power (generated by the income that comes from the increased number of jobs).

A very strong labour market can be a cause of inflationary pressures, however, as a tight labour market – where employers face competition for new workers as a result of the relatively low number of people looking for work – can lead to increased labour costs. Such wage inflation increases the likelihood that interest rates will be raised by the Federal Reserve. This will, in turn, have an impact on bond and stock prices.

What are market expectations?

A Bloomberg survey forecasts Initial Jobless Claims of 475K, compared with the previous figure released which was 473K. A similar survey predicts 4,450K for continuing claims, compared with the previous figure of 4,456K.

U.S. - Factory Orders (July)

Released by: Census Department, Department of Commerce (monthly report)

Time: 15.00

What is it?

This measures the value of new orders, shipments, unfilled orders and inventories reported by US manufacturers.

Figures are reported in billions of dollars and also in percent change from the previous month.

Why is it important?

It provides an in-depth picture of the manufacturing sector and the figures contained in the report can be used to gauge recent supply and demand: high shipments may indicate high demand, whereas high inventories may tends to point toward an excess of supply over demand.

As durable goods make up so much of the value of factory orders, the impact of the report is lessened somewhat by its timing (being released a week after durable goods figures).

A high reading is seen as positive for the economy as a whole, as it implies increased household income and spending.

What are market expectations?

According to a Bloomberg survey of economists, a change of 0.2% is expected, compared with last month's figure of -1.2%.

U.S. - Pending Home Sales (July)

Released by: National Association of Realtors (monthly report)

Time: 15.00

What is it?

A report that divulges the contract activity of existing single-family homes.

The headline figure is a percentage change in the number of pending homes sales from the previous month.

Why is it important?

Paints a picture of how trends are developing in the US housing market.

Historically, the housing market is strongly correlated to the state of the overall economy, often turning in direction at similar points in the business cycle.

The housing market suffers when disposable income is low or consumer confidence is weak. Drops in housing demand, therefore, typically tally up with slowdowns in the economy at large, whilst rebounds in the housing market may presage economic recovery.

What are market expectations?

A Bloomberg survey of analysts yielded a median estimate of -1.0%. This compares with last month’s figure which saw a change of -2.6%.