What are the key macroeconomic indicators to watch?
This is just an overview about Macroeconomic indicators not a Detail explanation.
Macroeconomic indicators are a key part of fundamental analysis for traders, as they provide insight into the state of a country’s economy. Discover 11 macro indicators to watch and the most important indicators by country.
Top 11 macroeconomic indicators to watch
The best macroeconomic indicator to watch will heavily depend on your personal preferences, what positions you are taking and which country your portfolio is focused on. However, there are some very common indicators that most traders and investors will keep an eye on.
For simplicity’s sake, we have split these out into leading and lagging indicators.
Top leading indicators:
The stock market
House prices
Bond yields
Production and manufacturing statistics
Retail sales
Interest rates
Top lagging indicators:
GDP growth rates
The Consumer Price Index (CPI) and inflation
Currency strength and stability
Labour market statistics
Commodity prices
Let's See Interest rate which is little controversial:-
There are arguments for interest rates as both leading and lagging. They are lagging in the sense that the decision to increase or decrease rates is made by central banks after an economic event or market movement has already occurred. However, they are also leading because once the decision has been made, there is a significant likelihood of the economy changing to reflect the new rate.
For example, during periods of health, when there is high consumer spending and high rates of inflation, central banks can be expected to raise interest rates to stop the economy growing too quickly. This decision confirms growth. However, the new rates mean that banks will have to pay a higher rate to obtain money, they will in turn increase the cost of borrowing for consumers. This makes consumers more reluctant to borrow money and discourages spending. The decisions made by central banks will have a significant knock-on effect to banks, consumers and business all around the world.
On the other hand, if the economy is stagnant, analysts will expect central banks to lower interest rates to boost spending. The decision confirms the economic situation is gloomy but is an indication that the cost of borrowing will soon go down, spending will increase, and the economy will start to grow.