Award-winning investment insight by Trading Central
TIOmarkets has announced the release of a new version of Trading Central in the client portal.
You can now view technical analysis by market category and search for trade ideas for individual instruments more easily.
You can now log in to see the changes, provided your available balance exceeds 500 USD (or equivalent).
Trading central technical analysis provides actionable insights for forex, stocks, indices and commodities markets.
Get daily trading ideas and signals, including European and US session outlooks.
We hope this enhances your experience and helps you make smarter trading decisions.
Access fresh trading ideas, twice daily, or simply review the hottest market news, provided by Trading Central.
Trading Central is a member of ANACOFI-CIF, an association approved by the AMF, and registered with ORIAS under number 17005458.
Gain an in-depth understanding of markets that you could utilize in your trading strategy, including forex, indices, and stock commodities.
Benefit from unbiased research, given for free to holders of the markets VIP and VIP Black trading account types, offering trading conditions from $0 commissions per lot and tight spreads.
What are the major economic events?
There are basics that every trader needs to understand before they start investing money in the financial markets.
As you may or may not be aware, markets are generally driven by sentiment and often are seen as measures of trader psychology or human behaviour.
When we hear news on our television sets we are often influenced in an emotional way, we are even more influenced when we speak to/see other people who have experienced the same emotional response we do, and are therefore more likely to respond to the news, or take action.
The markets are no different.
When we hear positive news about a country we are living in or about a company we buy from, we are more likely to invest emotionally and financially in that country or company.
We are even more compelled to do so, if other people become invested.
Does all news affect us in this way? The short answer is no. Is all news important? Not really. So what should we be paying attention to?
The next chapter will go over the major events you will want to pay attention to during your trading sessions.
Major events are introductions into one of the two key types of analysis: fundamental analysis.
Introduction of Fundamental Analysis
Fundamental analysis provides a snapshot of the major macroeconomic indicators driving an economy’s growth such as economic growth, interest rates, levels of employment, prices that consumers pay for products as well as productivity from major industries and consumers themselves.
Let’s address the major macroeconomic events individually so we can understand why they have such a big impact on the markets.
1. Employment data
Firstly, employment data.
When a country releases information about the level of employment in the economy it is giving an indication of its economic health.
High employment tends to come at times when the country is doing well economically and by contrast, high levels of unemployment tend to come about in recessions.
Clearly, the more workers are contributing to the economy, through productivity and hard work the more profitable the companies that they work for will be, the more innovation takes place and hence the more competitive that economy becomes on a global scale.
In other words, other countries may buy their products or pay for access to their services.
By the same token, with more consumers in full employment and in secure jobs, the more they are likely to spend their hard-earned money on food, cinema tickets, cars and houses.
Increasing employment has a positive effect on an economy’s currency.
Declining employment in comparison, is bad news for the country’s currency.
In more recent years, specifically during the Great Recession which started in 2007, central banks switched their policies to become employment targeting.
2. Consumer Price Index (CPI)
Inflation also known as Consumer Price Index (CPI) is another metric followed closely by central banks and market participants to assess future business conditions for an economy.
Inflation measures a basket of consumer products creating an index of price change.
The index includes food prices, residential property and energy prices.
This becomes a broader measure of demand from consumers as prices tend to rise when consumers spend more.
3. Interest Rates
Interest rates are closely linked with inflation as many central banks target inflation as a measure of overheating or look at the index as a marker for further stimulus.
Most developed economies have a price stability mandate of between 1-3% annual growth in prices.
In other words, most major central banks are comfortable with 2% growth in the CPI on a yearly basis.
Interest rates enter the equation when the central bank is trying to control or provide support for the economy.
If inflation is high, generally, central banks will raise interest rates to encourage consumers to save more and take advantage of the higher returns on offer.
In periods of low inflation, central banks may cut interest rates to encourage consumers to spend more and save less.
When central banks believe the economy is overheating, they switch policies, intervening on the markets with raising interest rates.
A central bank is described as hawkish when they favour stimulatory monetary policy and when they feel the economy needs stimulus through an interest rate cut, they are described as dovish.
A rise in interest rates is also called monetary policy tightening and a cut in interest rates is called monetary policy easing.
4. Gross Domestic Product (GDP)
Economic growth or GDP is the key measure of economic health.
It is the best indicator of how the economy is performing on a global scale.
The indicator encompasses consumer spending, business investment, government spending and the difference between import and exports (the amount spent on foreign goods minus the amount earned from selling domestic goods).
It is a broad measure of output and the balance of investment versus spending.
An increase in economic growth is seen as positive for the currency. However, a fall in GDP is seen as bad news for the currency.