Types of Economic News
- Gross Domestic Product (GDP): This indicator measures the total value of goods and services produced by a country in a specific period, usually a quarter or a year. A higher GDP figure signals economic growth and a favorable environment for investments, which boosts the stock market and the currency of that country.
- Interest Rates: The decisions of central banks to raise, lower, or maintain interest rates have a significant impact on financial markets, especially on the bond and currency markets. Higher interest rates attract more foreign capital into a country, which strengthens its currency and raises the yields of its government bonds. Conversely, lower interest rates stimulate borrowing and spending, which can lead to inflation and a weaker currency.
- Inflation: This indicator measures the changes in the prices of goods and services over time. High inflation levels indicate a decrease in the purchasing power of the currency and a potential rise in interest rates to control it. Low inflation levels suggest a stable economic environment, which can benefit the stock market and the currency.
- Employment: The monthly report on non-farm payrolls and the unemployment rate in the US is a critical economic indicator that reflects the health and growth prospects of the labor market. A higher-than-expected job creation figure can boost investor confidence and fuel the stock market, while a lower-than-expected figure can trigger a sell-off.