Economic Calendars for Trading and Investments
Traders rely on market information to make trading and investment decisions.
Therefore, on top of in-depth market analysis, it’s vital to focus on the calendars and the critical events around the markets.
Ideally, approaching trading strategies with the calendar of events forms a solid basis for your fundamental analysis.
This post will find critical questions, essential calendars, and what you can look for under each type.
Also, there’s an exclusive FAQ on key queries around the calendars.
What is an Economic Calendar?
The economic calendar is a schedule of significant releases or events with a high probability of affecting the prices of stocks or currency pairs.
It helps with the projections for better decisions across investment timeframes.
The calendars are available for free across many sites.
Most sites will mark high-impact events with the color Red. Orange or Yellow for medium impact and green for low impact events.
The records are by country and time zones. If an event is data-driven, there’s usually the previous score and a forecast.
And the scores are updated in real-time as actual results hit the markets.
If you work with sites like the DailyFX, you’ll get a summary with the color codes, as seen below.
Let’s go over the types of Calendars.
Economic Calendar
Usually, the Economic calendar consists of anything that analysts believe can impact prices.
However, there are the black swans or surprise events — wars, calamities, and pandemics. There are no predictions on black swans. Yet, they have high impacts on prices across timeframes.
As an investor, your knowledge of the economic calendar brings more insight to your analysis of the markets.
While at it, there are more sorts of calendars. However, working from an economic calendar is fine.
And since investors look for a more peculiar bit of information, we’ll expound this discussion to more of what you can find.
Earnings Calendar
Precise information regarding earnings is a significant factor for shareholders. The announcements cause huge price moves in price due to the high volatility.
Therefore, knowing the timelines when key companies release the information should be a factor to slot into your investment timelines.
Companies post quarterly results a month after the expiry of a quarter. So, the months to pay attention to here are January, April, July, and October.
Also, some companies release this information on an annual basis.
Here’s what t to look for after announcements:
● One is an increase in profits — demand for stocks goes up, and the prices also go up.
● Second is the result of losses — investors lose demand for the stock, and its prices decrease.
Dividends Calendar
Dividend calendars apply to shareholders. It helps make records more transparent when your name should be in their database for you to claim the dividends.
Of course, prospective shareholders can see the opportunity costs of not owning a stock over time.
And most companies share the dividend calendar every quarter.
Dividend calendars can clarify if stocks will sell ex-div of cum-div.
And Cum-dividend implies a new owner is entitled to the dividend payouts.
Conversely, ex-dividend implies shares will transfer without the new owner being entitled to the last payout of dividends.
Splits Calendar
Stock splits happen when a company increases the number of outstanding shares. It has some benefits, like increased liquidity of the underlying stock.
For big firms, stock split decisions and timelines are vital factors for investors. And each explores the information to help them make better decisions.
In finer details, the splits may come up with significant shifts affecting share pricing and earnings afterward.
So setting the records clearly regarding the actual transitional dates comprises the key components of a splits calendar.
IPO Calendar
Investors need to pay attention to calendars of Initial Public Offerings are another key area. Other than national listings, the timelines and related information may appear across notable stakeholders like stock brokers and exchanges.
Some of the vital information from an IPO calendar comprises:
● A current date
● Dates of Offer
● Stock tickers or official initials
● Names of the Issuing companies
● Exchange floating the IPO
● Range of prices per stock
● Values of the IPO
● Shares available for the IPO
Following is an image of the listing of the IPO calendar by the FXEMPIRE
NB: The Plus sign on the right of the record can allow investors to expand the record. See the image below — showing the underwriters. Some IPOs have more than one underwriter.
Holiday Calendar
Holidays occur every other month. And therefore, the Holiday calendar for investors takes on a global point of view.
The point of focus is for an investor to look up the information that may have close affiliations with their investment targets.
One example is from the Holiday Calendar image below:
With the foresight that Labor Day will affect the NSE. Another way to look at it is to expect lower volumes of trading performance across the North American Session on that particular day.
And the performance results may be seen across other spheres. In Forex markets, the Holiday may have ripple effects on major pairs. That arises given the fact that the performance of the US economy triggers huge reactions with closely related ones.
One notable example is Gold (XAUUSD) compared to the USDJPY pair. On price charts, when one goes bullish, the high chances are that the other goes bearish.
Central Bank Calendar
Central bank calendars are another key aspect for investors to watch. These are the institutions charged with managing the fiscal and monetary policies.
Of key interest to the Central banks are the changes in interest rates. Usually, any changes have huge effects on stocks and Forex across the markets.
Usually, it’s easy to access the list of the central banks’ calendars. However, the more complex part is anticipating the correct implications of confirming decisions across market prices.
Next, below is an extract from the Central bank calendar — showing key dates. As you can see, according to DailyFX, you can choose to view it per central bank or narrow it down to a particular month.
Parting Shot — Economic Calendars
The economic calendar is a key component for traders and investors. It can guide them on the schedules of everyday activities to inform their planning.
The need to narrow down to picking the information that will help you is of particular interest. Also, pick on a calendar that most coincides with your needs. The IPO calendar can help stock investors looking for upcoming IPOs.
On the flip side, the economic calendar does not anticipate sudden market effects- a.k.a, the black swans.
Lastly, traders and investors who use the economic calendars can bring additional insights into their investment cycles and strategies.
Economic Calendars FAQs
Why do we have an economic calendar?
An economic calendar acts like a compass for investors and traders. It contains data records showing actuals and projections for various events across national economies.
Traders use the timelines to help them make decisions and plans accordingly.
What is economic calendar Forex?
An economic calendar in Forex details all the projected events that may impact the prices of currency pairs. Mostly, analysts give three categories for the events according to the projection of the impact. It could be high, medium, or low.
What are economic reports due next week?
The best way to capture the economic events within the coming week is to limit the sorting to the coming week.
What is the most important news in Forex?
The most important news in Forex affects the currency pairs you trade. However, the following categories often light up the markets: Interest rates, Gross Domestic Product- GDP, Consumer Price Index -CPI, Overnight Interest Rates, and the data on the U.S. Nonfarm Payrolls (NFP)
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