9. The big picture: macro, markets and news

The economic calendar (ECO)

ECO lists upcoming and recent economic releases and central bank events by time, with their impact and the actual, forecast and prior numbers.

  • 4 min
  • 3 questions
  • Lesson 1 of 4

Why you would care

What data comes out today, and how did it compare with expectations? Every trader starts the day by checking the calendar. A jobs report or a central bank decision can move every market at once, and you want to know before it happens, not after. The calendar also tells you what "surprise" means for each number: the gap between actual and forecast.

The idea from scratch

Governments and central banks publish data on a fixed schedule: inflation, jobs, retail sales, business surveys, trade, housing, rate decisions, and speeches by officials.

For each release the calendar shows:

Actual
The number just published
Forecast
The consensus: the median of economists' forecasts
Prior
The previous release (sometimes revised)
Impact
How much this release usually moves markets: low, medium, high

The market reacts to the surprise: actual minus forecast (chapter 01, How information reaches prices and The macro machine).

Not every number is "good when higher": higher unemployment claims are bad news for the economy; higher inflation can be bad for bonds.

Diagram: Release schedule leads to Time arrives; Forecast: consensus leads to Actual vs forecast; Time arrives leads to Actual vs forecast; Actual vs forecast leads to Upside surprise (above); Actual vs forecast leads to Downside surprise (below); Upside surprise leads to Market reaction: yields, currency, stocks; Downside surprise leads to Market reaction: yields, currency, stocks.

See it in Gloom

Gloom screenshot: ECO: today's and yesterday's releases with time, impact, country, event, actual, forecast and prior; the NOW line marks the current time
ECO: today's and yesterday's releases with time, impact, country, event, actual, forecast and prior; the NOW line marks the current time. Historical example.

open ittype ECO. Filters on top: Impact (All, High, Med, Low) and Region (All, US, G7, EU). f cycles impact, c region, Enter opens an event.

  1. The NOW line: everything above it is still to come today.
  2. 07:00 LOW JP BOJ Core CPI y/y, no actual yet, forecast 1.5%, prior 1.6%: a Japanese inflation figure that is not out yet.
  3. 14:30 MED US Unemployment Claims 197K 201K 196K: actual below forecast, shown in red (red and green show below or above the forecast, not good or bad).
  4. 16:00 LOW US New Home Sales 684K 615K 607K: a big upside surprise.
  5. 10:00 HIGH CH SNB Press Conference: a central bank event; events like speeches have no numbers.
  6. Times are in your computer's local time: here 14:30 is 8:30 in New York.

Practice and recap

Try it3 tasks
  1. Which US release in the screenshot surprised most, in percent? (New home sales: 684K vs 615K, about +11%.)
  2. Is a lower-than-forecast unemployment-claims number good or bad for the economy? (Good: fewer people lost jobs.)
  3. Why do speeches by officials appear on an economic calendar? (They can change expectations for interest rates.)
Common mistakes4 mistakes
  • Reading the color as good or bad news; it shows only above or below the forecast.
  • Ignoring revisions to the prior number, which can matter as much as the new one.
  • Forgetting time zones.
  • Treating low-impact releases as irrelevant on quiet days: they can still move a single market.
Check yourself3 questions
  1. What three numbers does each release show?
  2. What is the surprise?
  3. Why can a higher number be bad news?
Answers
  1. Actual, forecast (consensus) and prior.
  2. Actual minus forecast.
  3. Some indicators measure bad things (unemployment claims, inflation): more of them is worse.
Words in this lesson5 words
economic calendar
The schedule of data releases and central bank events.
actual / forecast / prior
The released number / the consensus / the previous release.
impact
How much a release usually moves markets.
revision
A change to a previously published number.
jobless (unemployment) claims
Weekly count of new US unemployment benefit claims.

Educational material about reading market data, not investment advice.