Non-Farm Payroll (Unemployment Data)
The Non-Farm Payroll announcement is the release of employment data that is not related to farm jobs or private household employees or non-profit organisations. This accounts for approximately 80% of the workers that produce the entire GDP of the United States. This, of course, is one of the most influential statistics that is released on the first Friday of every month by the Bureau of Labour Statistics.
The announcement of the US Non-Farm Payroll affects the US Dollar (USD) and US Equities the most. Large increases indicate that the economy is doing well, and you should thus see an increase in both the USD and US equities and vice versa.
Interest Rate Decisions
The announcement of interest rate decisions is another key announcement to watch out for. Interest rates have a huge impact on the forex market and the stock market. Interest rates affect the economy because increasing interest rates would increase the cost of borrowing making it more expensive for firms and consumers to borrow which should decrease economic activity. As the stock market usually reflects the state of the economy, equities should fall. The opposite also holds true as a decrease in interest rates would make it easier for firms and consumers to borrow stimulating economic activity.
On the other hand, the local currency rises due to increases in interest rates. This is because people would earn more on their deposits and buy more of the currency to earn the higher interest rate provided. If interest rates fall, investors will look elsewhere to invest or store their money and hence sell the local currency which will depreciate.
Lastly, this one is pretty obvious, GDP is the Gross Domestic Product and it measures the total value of goods and services produced by the economy. GDP Data is also released every month. It is the most accurate representation of the state of the economy and as such the stock market is usually affected greatly by the announcements in GDP. Good GDP data results in rising equities and bad GDP data would most likely result in the fall of equities. The local currency may also be affected as investors see countries with large increases in GDP as a likely place for interest rate rises. Hence they would shift their currency in and out of the country depending on the GDP statistic.
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