Leading Economic Indicator Approach lagging ~ forex trading programs reviews
Trading forex fundamental analysis is based on a popular strategy for provide clear information to make a decision. Is a decision that reasonable (not necessarily right) for long positions when the indicator of economic growth (eg GDP) showed a significant increase. Trader fundamentalist better believe in economic indicators for the open position oversold buy signal than a given indicator technical. However, almost similar to the technical indicators, there are economic indicators are leading and lagging nature.
Economic indicators are leading indicators means that indicates the state of the economy that will happen, being that is a lagging economic indicator shows changes in circumstances economy that has occurred. Eg PMI leading indicator (Purchasing Managers Index), ZEW Economic Sentiment, Indeks Ifo Business Climate Jerman, UoM (University of Michigan) Consumer CB consumer confidence sentiment dan. These indicators provide clues as to whether economic growth will rise or fall in the near future. Examples of indicators that are is lagging GDP and the unemployment rate (unemployment rate). The unemployment rate increased after economic growth rate down, or economic conditions deteriorate. indicators yamg lagging can be used to predict other variables, such as GDP down there is a possibility lowered interest rates to spur investment, to result in lower values currency.
Economic Indicators Leader
Due to the nature of leading economic indicators has the potential to predict the direction of the economy, Government tax authorities often use as a reference in determining the policy for avoid the negative impact of the economy, such as the recession. Some economic indicators are primary importance :
1. Associated with manufacturing activities in the field of manufacturing
activity is an important indicator which has a direct impact on the economic growth rate of GDP represented by mass. GDP has increased the level of demand (demand) means also increased. demand for goods require increased resources human resources, which means more work and perhaps also with a higher level of salary. penting related indicators aktivitas is manufacturing PMI (le Purchasing Managers Index), industriel Orders and crop production.
Producing products just fall completely into the hands of consumers, but stored in a warehouse in advance that the inventory (inventory / stock), we have So also see sales data retail to determine the overall value for money retailing products sold.
2. Retail Retail Sales Indicator measures the actual production of manufacturing
activity, in terms of value money generated by the sale of retail products in a given period. Important note, sharp rise in retail sales increases directly affect GDP, which will strengthen currency. Retail sales totaled or data means improved or position perekonomia improvement.
3. Building Permits And start
Building permit or building permit or building houses illustrate the level of housing shares or other types of buildings (offices, hotels and so on). permitted building means that the construction industry will grow passionate, and work will also increase, which led to an increase in economic growth. update starts as an early indicator follow-up to establish the basics of building license.
4. Home Sales / Housing
Rise and fall in the rate of home sales has a direct impact on the economy. as happens when. S. in 2007, when the housing exceeds demand until prices down and stalled construction, which led to rising unemployment. in addition to Public property tax revenues will also be reduced, with a negative impact on the economy. di le U. S., Sale of Housing s existing home sales indicator, delayed and Home Sales of New Homes Sales.
5. Business sentiment
of business sentiment illustrates the high level of business confidence and investors to stimulate the economy, and is the main indicator of increased growth in the future. In the United States an important indicator of business climate UDM (University of Michigan) and Consumer Confidence Philly (Philadelphia) : Fed manufacturing index.
Delay Economic Indicator
Unlike the leading economic indicators, lagging indicators appear after the change, the conditions economy. Although not determine the direction of the economy, indicators confirm the delay changes had happened, and showed a trend change in the amount of the economy in the long run. For example, The indicator unemployment (unemployment rate). If the unemployment rate rise in a row, This means that the economy is slow or if the government is optimistic that the economic conditions improve, as an indicator of the unemployment rate drops confirmation. Here are some indicators important economic lagging
1. Gross Domestic Product (GDP):
GDP is a typical benchmark for economic growth. If the state of the economy means rising GDP Data is growing and is often used by business and industry sectors to evaluate shopping expenditure, salary increase, expansion and so forth. The government uses GDP benchmark in addition to the rate of inflation as one component in determining the rate interest. GDP is typically released per quarter (q / q), and in 3 versions, ie Advance, Preliminary dan Final. Advance GDP or GDP Estimated first released usually have greater impact.
2. The unemployment rate (Unemployment Rate) :
This indicator measures the percentage of the number of unemployed who are actively looking for a job in a month. The number of high unemployment will reduce the level of consumer spending, which will ultimately have a negative effect on GDP. In addition it will increase government spending with benefit programs for unemployment (in countries that use the currency of indeed implement this program). This data is usually released in conjunction with the amount of payroll workers who describe changes in the number of jobs outside the agricultural sector (Non Farm Payrolls).
3. The level of income and wages of workers
If the economy run efficiently, income levels and labor costs will rise regularly according to the rate of inflation. If a decline in wages, it means that there has been a reduction hours of work or workers housed. This suggests that the economy is sluggish or heading towards recession. Which includes indicators of Average Weekly Earnings are and Personal Income.
4. The rate of inflation (Consumer Price Index)
Consumer Price Index (CPI) rate reflects the rate of overall inflation. If the CPI rise, inflation rises. The CPI measures price changes goods and services, and the effect is usually the core CPI (Core CPI), the CPI excluding prices of food and energy. Traders note the rate of inflation is important because it relates to The central banks policy for determining the interest rate. High rates of inflation push the central bank to raise interest rates.
5. The interest rate (Interest Rates)
high interest rates cause the value of the money gained. Usually the interest rate is determined by the central bank once a month, and a moment that has always given the traders awaited a very significant impact when the result of the release of stray far from the expected market.
6. Balance of Trade (Trade Balance)
The trade balance is the difference between the value of exports and imports of goods and services. Surplus when the results if the results are positive and negative deficit. In the long term, the trade deficit would weaken the value of the currency. Trade balance data released once a month. In the past This data release quite an impact on the forex market before then shifted by the magnitude of the impact Rilis date Non Farm Payrolls.
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