What economic data are the markets currently reacting to?

On the economic calendar a fairly large amount of information is published. On average, 15-16 indicators are updated, which may have an impact on the stock, currency market, debt market (state corporate).

Understanding it, comparing it and correctly interpreting it is a rather time-consuming and extremely thankless task. Why? Because the probability of an erroneous forecast, if there is no systematic approach to analysis - close to 100%. And there is even a systematic approach - it is still very high. There is no need to go far - all the leading central banks made a mistake a year ago when assessing the nature of inflation, I consider it a shock and one that will calm down by itself if the markets are saturated with goods. The mistake was that quarantine measures worked like a nervous system in cases where the body fell into a coma - some of its segments either die or become deformed.

It turned out that the world BEFORE covid and AFTER are two different systems, and the actions of central banks proceeded from the fact that economic relations remained the same, which led to such serious consequences.
Well, after a long introduction, let's return to the question of mainstream economic data, which now have the main influence and which must be monitored:

  1. Inflation. Moreover, in all countries, the top 20 and, first of all, the consumer price index (CPI). Typically, the publication of these data begins on the 10th of each month. To believe these data or not is a purely private matter, but central banks believe and make decisions based on them.
  2. Unemployment or labor market - as anyone. Usually this is a quarterly figure, but the US, Canada, UK, Australia, Germany publishes this data every month. The whole set of changes in the number of applications for unemployment, the number of people employed in agriculture, etc. — works of course in aggregate. Those. no matter how sensational the data is - but all this matters only when there is a certain trend for at least 6-9 months. The only exception was in March 2020.
  3. Real estate market is a relatively new object of study that has become the focus of attention since the summer of 2022. Its nature is clear: the growth of rates will negatively affect the dynamics of the real estate market, which in itself is an important object of capital accumulation. In addition, a decrease in the value of real estate, which in the overwhelming majority is the object of collateral for the bank, will eventually lead to the need for additional formation of reserves by banks to cover credit risks, which in turn will reduce their level of profit. Such is the cycle.

I emphasize - these are the main GROUPS of indicators of the ECONOMIC calendar today. Of course, the speeches of central bankers, the level of yields, the values of credit default swaps and spreads are also important for the market, but they belong to a different category of indicators.

Author: Novel in macroeconomics

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