1. What are macroeconomic indicators?

Macroeconomic indicators are economic statistics which are released periodically by government agencies and private organizations. These indicators provide insight into the economic performance of a particular country or region, and therefore can have a significant impact on the Forex market.

2. Gross Domestic Product

Definition: Gross Domestic Product (GDP) is the total market value of all goods and services produced within a country’s borders in a particular time period, including production by foreign companies working in the country’s territory, but excluding production by domestic companies abroad.

Description: The GDP report is one of the most important indicators of the strength of the American economy. It shows the market value of all goods and services produced within the country in a certain time period. The main components of GDP are consumption, investment, net exports and government spending and inventories; with individual consumption generally making up two-thirds of US GDP.

Influence: A rise in GDP indicates that the American economy is growing. This makes it more attractive to investors and tends to strengthen the US dollar.

Market Impact: High

Released: GDP forecasts are released quarterly (January, April, July, October) on the last working Thursday of the quarter (or on Wednesday, if it happens to be the last working day of the quarter, etc.). Revisions are released a month later, followed by the real GDP numbers a month after that. All GDP reports are released at 8:30 AM ET.

Source: US Census Bureau

3. 3-Month LIBOR Range (Switzerland)

Country: Switzerland

Definition: The London Interbank Offered Rate (LIBOR) is the interest rate at which major banks distribute loans in the London interbank money market. The 3-month Swiss Franc LIBOR is the average interest rate banks in London charge for 3-month loans in CHF.

Description: The 3-month LIBOR is used as a reference rate in Swiss monetary policy. The Swiss National Bank sets a target range for this rate extending over 1 percentage point and aims to keep the LIBOR within this range. LIBOR rates are fixed daily at 11:00 London time. They are calculated as the average of the last ten quotes offered by sellers.

Influence: High interest rates lead to a decrease in lending and trigger an increase in consumer savings, causing a slowdown in economic growth. A rise in the Swiss LIBOR usually leads to an increase in capital flowing into Switzerland and provides a boost for the Swiss franc in the medium term. However, if the increase in rates is not accompanied by rapid economic growth, this may lead to economic stagnation and have a negative impact on the franc in the long run.

Market Impact: High

Released: Quarterly (March, June, September, December), usually on the third Thursday of the month

Source: The Swiss National Bank

4. Durable Goods Orders

Definition: This index measures the volume of orders of durable goods, or goods whose intended lifespan is three years or more.

Description: The Durable Goods report is considered a leading indicator of US manufacturing activity. An increase in orders means more future business for manufacturers. The market often moves on this report in spite of its high volatility. Approximately 3/5 of all durable goods orders are for cars and trucks, with building materials, furniture, and household items accounting for most of the remaining part.

Influence: The Durable Goods report is often able to detect shifts in the US economy up to six months in advance. A decline in orders may signal an economic slowdown (and drop in the US dollar), whereas an increase could signal expansion (and rise in the US dollar).

Market Impact: Medium