Market indicators have a strong influence on market movement. Whether it’s the latest cash rate target of the RBA or employment statistics in the US. How does one interpret these numbers and can one respond accordingly?
We have created an infographic explaining what these indicators are and why they impact the market.
CIO Ian Martin’s list of top indicators.
|Country||Indicator||Why Ian’s watching it|
|AU||RBA Cash Rate Target||There are times when the RBA is on a known and predictable path and as such might not be at the top of the list. An example of this could be if the market is expecting the RBA to follow the Fed in the USA. For now the RBA is on a different path as it is on hold while the Federal Reserve is on a program of steady increases in its overnight cash rate.|
|US||Change in Non-Farm Payrolls||One of the most watched high frequency economic data points around the world. It and the corresponding wage data triggered the February equity correction|
|AU||Unemployment Rate||Like its US equivalent one of the most easily grasped economic data points. However wage data is also keenly watched by the RBA.|
|US||Initial Jobless Claims||A good indicator for the Non-Farm payrolls data.|
|US||FOMC Rate Decision||The Federal Open Markets Committee or FOMC as it is known, is part of the Federal Reserve. The FOMC sets the overnight interest rate and is chaired by the Chairperson of the Federal Reserve. It has done a great job in steering interest rates away from zero and keeping the market calm, despite one or two “Market Tantrums” along the way.|
|US||GDP MoM||The Federal Open Markets Committee or FOMC as it is known is the part of the Federal Reserve. The FOMC sets the overnight interest rate. Chaired by the Chairperson of the Federal Reserve. It has done a great job in steering interest rates away from Zero and keeping the market calm, despite one or two “Market Tantrums” along the way.|
|US||CPI MoM||One of the FOMC’s statutory mandates is stable prices. However, they would like to see slightly higher levels of inflation than currently observed. 2% over the longer run is judged to be consistent with the objective of stable prices while ensuring maximum employment. Personal consumption expenditure is their preferred measure.|
|US||ISM Manufacturing||Over 300 manufacturing firms surveyed by institute of supply management. Great indicator of business confidence.|
|AU||GDP SA QoQ||Gross Domestic Product. Although not for some time in Australia, but 2 declines in GDP define a recession. By the time it is published many of the components are known.|
|AU||CPI||The RBA has a long target of 2-3%|