Balance of Payments

The difference between exports and imports of Euro-zone goods and services. The Trade Balance is one of the biggest components of Europe 's Balance of Payment, and thus gives valuable insight into pressures on the value of the Euro.

A negative Trade Balance figure (deficit) indicates that imports are greater than imports. When exports are greater than imports, the Euro-zone experiences a trade surplus. Trade surpluses indicate that funds are coming into Europe in exchange for exported goods and services. Because such exported goods are usually purchased with Euros, trade surpluses typically indicates that currency is flowing into the Euro-zone. Such currency inflows may lead to a natural appreciation of a Euro, unless countered by similar capital outflows. At a bare minimum, surpluses will buoy the value of the currency.

There are a number of factors that work to diminish the market impact of Euro-zone Balance of Trade. The report is not very timely, released fifty days after the reporting period. In addition, developments in many of the Trade Balance's components are typically well anticipated. Lastly, since the report reflects data for a specific reporting month, any significant changes in the Trade Balance should plausibly have been already felt during that month and not during the release of data. Despite these considerations, and because of the overall significance of Trade Balance data, the release has historically been one of the more important reports out of Europe .

The headline figure for trade balance is expressed in millions of Euros, and usually accompanied by the year-on-year percentage change.

Relevance: Tends to move markets on release
Release schedule : 9:00 GMT; monthly, about 50 days after reporting month
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer > Euro-indicators - External trade > Trade Balance and indices > Balance of Trade - Trade value

The German Current Account acts as a gauge for how Germany's economy interacts with the rest of the world. Current account is one of the three components (Financial Account, Capital Account and Current Account) that make up a country's Balance of Payments, the detailed accounting of all international interactions. Where the other side of the Balance of Payments, Capital and Financial Accounts, deals mainly with financial assets and investments, the Current Account gives a detailed breakdown of how the country intermingles with rest of the global economy on a routine, non-investment basis.

The Current Account tracks the trade balance (exports and imports for goods and services), income payments (such as interest, dividends and salaries) and unilateral transfers (aid, taxes, and one-way gifts). A positive value (current account surplus) records that the flow of capital from these components into Germany exceeds the capital leaving the country. A negative value (current account deficit) means that there is a net capital outflow from these sources. Since the German economy is by far the largest in the EU, German Current Account has significant weight on the Euro. Persistent Current Account surpluses may lead to a natural appreciation of a currency, as trade, income and transfer payments usually reflect Euros coming into the country (just as underlying deficit act as depreciating weight).

There are a number of factors that often work to diminish the impact of the Current Account release on the market. The report is not very timely, released monthly about two weeks after the reporting period. In addition, many of the components that lead to the final Current Account, such as production and trade figures, are known well in advance. Lastly, since the report reflect data for a specific reporting month, any significant developments in the Current Account should plausibly have been already felt during that month and not during the release of data. But due to the significance of German Current Account in tracking foreign exchange developments, the report has a history of moving markets upon release.

The headline number is the Current Account balance and the percentage change in the Current Account from the previous month.

Relevance: Tends to move markets on release
Release schedule: 6:00 (GMT); monthly, during the second week of every month
Source of report: Deutsche Bundesbank Bank
Web Address: http://www.bundesbank.de/index.php
Address of release:
http://www.bundesbank.de/volkswirtschaft/vo_monatsbericht.en.php
AKA: Current Account Surplus/ Deficit, CA

The difference between the value of exports and imports in Germany. Trade Balance is one of the biggest components of Germany 's Balance of Payment. As Germany is Europe's largest economy and given Germany's export oriented economy, trade data can give critical insight into pressures on the value of the Euro.

In order to gauge the effect of German Trade Balance on the Euro, German trade is separated into intra-Euro-zone trades and extra-Euro-zone trades. Intra-trades between Germany and Euro-zone member countries have no affect on the overall valuation of Euro. Extra-trades between Germany and other countries outside of Euro-zone do impact the overall Euro-zone trade balance. Given Germany's large share of Euro-zone exports, the figure tends to move the market upon release.

Trade surpluses reflect funds coming into Germany in exchange for goods and services. Such currency inflows may lead to a natural appreciation of a Euro, unless countered by similar capital outflows. At a bare minimum, surpluses will boost up the value of the currency.

The headline figure for trade balance is expressed in billions of Euros.

Relevance: Tends to move markets on release
Release schedule: 6:15 (GMT); monthly, provisional reports are available approximately 40 days after the end of reference period.
Source of report: Federal Statistical Office Germany
Web Address: http://www.destatis.de/indicators/e/iwf01.htm
Address of release: http://www.destatis.de/indicators/e/ahlueb.htm
refer to Trade Balance
AKA: Foreign Trade, Balance of Trade

Goods and services produced domestically that are sold or awaiting sale outside of Germany . The headline number is the percentage change in the Exports value.

The value of Exports is an important input in calculations of the Trade Balance, the Current Account and GDP. Exports are rarely considered in isolation. Rather, they are most often analyzed in comparison to Imports. Generally, excess exports indicate a country's goods are seen as desirable abroad, which signals that this country's currency is relatively weak (cheap) compared to that of its trading partners and may appreciate in the future due to robust demand.

Relevance: Rarely affects markets
Release schedule: 6:15 (GMT); monthly, provisional reports are available approximately 40 days after the end of reference period.
Source of report: Federal Statistical Office Germany
Web Address: http://www.destatis.de/indicators/e/iwf01.htm
Address of release: (Only available in German)
AKA: EX

Represents German domestic demand for foreign goods. The headline number is the percentage change in the value of imports.

The value of imports is an important input in calculations of the Trade Balance, the Current Account and GDP. Imports are rarely considered in isolation. Rather, they are most often analyzed in comparison to Exports. German imports (and exports) are separated by intra-community trade and extra-community trade. Intra-community trade covers trade within the EU member countries while Extra-community trade covers trades with the rest of the world. A strong demand for imports from the Extra-community could lead to a trade deficit that could result in a drop in the currency's value.

Note: The import report aggregates the Intra-community trade and Extra-community trade to provide overall import values. The report is seasonally adjusted to avoid confusion caused by month to month volatility in sales.

Relevance: Rarely affects markets
Release schedule: 6:15 (GMT); monthly, provisional reports are available approximately 40 days after the end of reference period.
Source of report: Federal Statistical Office Germany
Web Address: http://www.destatis.de/indicators/e/iwf01.htm
Address of release: http://www.destatis.de/indicators/e/ahlueb.htm
AKA: IM

Measures the change in prices for goods imported by Germany. The Import Price Index is important in distinguishing changes in trade volume versus changes in trade prices. Whereas growth in import volume suggests stronger consumer demand and economic expansion, growth in import prices suggests higher production costs and inflationary pressures. Only when growth in import volume is also complemented by stable import prices can it be indicative of real economic growth.

The headlines are the monthly and annual percentage change in the index.

Relevance: Rarely affects markets
Release schedule : 6.00 (GMT); monthly, near the end of the every month
Source of report : Federal Statistical Office Germany
Web Address : http://www.destatis.de/e_home.htm
Address of release : http://www.destatis.de/indicators/e/tkpre530.htm
AKA : The Index of Import Prices

Current Account
The The Current Account summarizes the flow of goods, services, income and transfer payments into and out of the country. The report acts as a line-item record of how the domestic economy interacts with rest of the world. The Current Account is one of the three components that make up a country's Balance of Payments (Financial Account, Capital Account and Current Account), the detailed accounting of all international interactions. Where the other side of the Balance of Payments, Capital and Financial Accounts deal mainly with financial assets and investments, the Current Account gives a detailed breakdown of how the country intermingles with rest of the global economy on a non-investment basis - tracking good and services.

Current Account - Euro-zone
Summarizes the flow of goods, services, income and transfer payments in and out of the Euro-zone nations to other countries. The report gauges how the Euro-zone nations' interact with the rest of the world. Current Account is one of the three components that make up a country's Balance of Payments (Financial Account, Capital Account and Current Account). Where the other side of the Balance of Payments, Capital and Financial Accounts deal mainly with financial assets and investments, the Current Account gives a detailed breakdown of how the country interacts with rest of the global economy on a non-investment basis.

The Current Account tracks the trade balance (exports and imports for goods and services), income payments (such as interest, dividends and salaries) and unilateral transfers (aid, taxes, and one-way gifts). A positive value (current account surplus) indicates that the flow of capital from these components into the Euro-zone exceeds the capital leaving the Euro-zone. A negative value (current account deficit) means that there is a net capital outflow from the Euro-zone. Persistent Current Account deficits may lead to a depreciation of a currency, as trade, income and transfer payments usually reflect that Euros are leaving the Euro Area to make payments abroad. Conversely, underlying surpluses act as an appreciating weight on the Euro.

The Euro-zone has a historically had an export oriented economy and has relied on exports as the engine for economic expansion. To this day, trade surpluses form the foundation of Euro-zone current account surpluses.

There are a number of factors that often work to diminish the impact of the Current Account release on the market. The report is not very timely; released monthly at least a month after the reporting period. In addition, many of the components that lead to the final Current Account, such as production and trade figures, are known well in advance. Lastly, since the report reflects data for a specific reporting month, any significant developments in the Current Account should theoretically have been already felt during that quarter.

But just like GDP and Trade Balance, Current Account is central to forecasting long term developments in foreign exchange rates. It gives a detailed picture of how the Euro-zone's aggregate economy interacts internationally, breaking down these exchanges into separate components that can be tracked and often anticipated. Thus the weight of the Current Account has led it historically to be one of the more important reports out of the Euro-zone.

The headline figure is expressed in billions of Euros.

Relevance: Tends to move markets on release
Release schedule : 8:00 GMT; monthly
Revisions schedule : Data is revised monthly to adjust for previously unavailable data from some member countries
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer to Euro-indicators - Balance of Payments > Current Account

Technical Definition of Current Account - Surpluses and Deficits
The Current Account tracks the trade balance (exports and imports for goods and services), income payments (such as interest, dividends and salaries) and unilateral transfers (aid, taxes, and one-way gifts). A positive value (current account surplus) indicates that the flow of capital from these components into the country exceeds the capital leaving the country. A negative value (current account deficit) means that there is a net capital outflow from these sources.

FX Ramifications of Current Account Developments
Persistent Current Account deficits may lead to a natural depreciation of a currency, as trade, income and transfer payments usually reflect the domestic currency leaving the country to make payments in a foreign currency (just as underlying surpluses act as an appreciating weight). Although, such depreciating weight may be offset by capital flows into the country - capital flows in the form of deposits in stock, bond, real-estate markets and other investments.

GDP and Output Report

Measure of the total value of goods and services produced by Euro-zone nations. GDP is the most comprehensive measure of economic output and provides key insight as to the driving forces in the economy.

Due to this report's lack of timeliness and because data on GDP components are available beforehand, the actual GDP figure is usually well anticipated. But given its overall significance GDP has the tendency to move the market upon release, especially if it upsets expectations. The GDP growth rate serves as a broad indicator for the health of Euro-zone economies. Robust GDP growth signals a heightened level of economic activity, which is generally positive. At the same time, economic expansion raises concerns about inflationary pressure, which can prompt the European Central Bank to increase interest rates. Consequently, positive GDP readings are generally bullish for a given currency, while negative readings are bearish.

The headline figure is the annualized percentage growth rate from the previous quarter. The figure is calculated as

GDP = C + I + G + (EX - IM)
where
C = private consumption
I = private investment
G = government expenditure
EX = exports of goods and services
IM = imports of goods and services

Technical note : GDP is the total market value of goods and services produced in Euro Zone within a given period after deducting the cost of goods and services used up in the process of production. Therefore, GDP excludes intermediate goods and services and considers final aggregates only. The Euro Zone GDP figures are released in seasonally adjusted current prices, seasonally adjusted constant prices, and non-seasonally adjusted constant prices.

Relevance: Tends to move markets on release
Release Schedule : 9:00 (GMT); quarterly, about two months after the quarter
Source of Report : Eurostat
Web Address : http://ec.europa.eu/comm/eurostat
Address of Release : http://ec.europa.eu/comm/eurostat
Refer Euro-Indicators > National Accounts > Gross Domestic Product
A.K.A. GDP

A measure of European investment in capital goods. Fixed capital investments typically increase productivity and GDP growth. When businesses are investing in the big fixed capital items, such as machinery, vehicles, and buildings, it typically reflects optimism for future growth; otherwise, those businesses would other uses for that money. Higher capital investments also tend to increase productivity and contribute to GDP growth. This makes GFCF a measure of business sentiment as well as a leading indicator for economic growth. The headline figure of GFCF is expressed in annualized percentage change for the quarter.

Note: GFCF makes up about 20% of the Euro-zone GDP, with Machinery, equipment, vehicles, land-improvements, and buildings being the biggest contributors. Software and artwork are sometimes considered as the intangible fixed assets.

Relevance : Rarely affects markets
Release Schedule : 9.00 (GMT) ; quarterly, 3 months after the end of a quarter
Source of Report : Eurostat
Web Address : http://ec.europa.eu/comm/eurostat
Address of Release : http://ec.europa.eu/comm/eurostat
Refer Euro-Indicators - National Accounts > Gross Fixed Capital Formation
AKA : Capital formation, Fixed Investment, Fixed Capital, Private Capital Investment

Euro-zone Household Consumption reports the mean expenditure on individual consumption goods and services per household per year. The figure is reported in the annualized percent change. Increases in Household Consumption are suggestive of increases in economic growth and of higher levels of consumer optimism, both positive indicators for the economy. However, unrestrained growth can result in inflationary pressures. Thus this report can be used as a leading indicator for inflationary pressures.

Relevance: Rarely affects markets
Release schedule : 9:00 (GMT); quarter, three months after the quarter, first week of the month.
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer Long-term indicators > Population and Social Conditions > Living Conditions and Welfare > Consumption Expenditure of Private Households
AKA: Household Spending

Measures the volume change of output of the manufacturing and energy sector. The industrial sector contributes to only a quarter of the Euro-zone GDP. However, most variations in GDP come from the industrial sector, whereas other sectors that contribute far more to national output historically have been very consistent regardless of economic cycles. That is why tracking industrial production is very important for forecasting GDP changes.

Note: The Industrial Production figure can be adjusted for the number of working days in the given time period and/or seasonally to account for weather related changes in production.

Relevance: Rarely affects markets
Release schedule : 9:00 (GMT), monthly
Revisions schedule: Because data for some countries is estimated, moderate revisions are made to the Euro-zone Industrial Production when actual data is available from those countries.
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer to Euro-Indicators (upper left) > Industry, trade and services > Industry (mid left) - Industrial production

The value of new contracts for goods produced by the manufacturing sector. A rising level of Industrial New Orders forecasts increased production and a rising GDP. There are two headline numbers released for this report, month to month and annualized change.

Note: Although the industrial manufacturing sector contributes only a quarter of Euro-zone GDP, it accounts for most of the variations in GDP.

Relevance: Rarely affects markets
Release schedule : 9:00 (GMT); monthly
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer to Euro-Indicators > Industry, commerce and services >
Industry, trade and services - horizontal view > Short-term Business Statistics - Monthly and Quarterly (Industry, Construction, Retail Trade and Other Services) > Select "Industry (NACE Rev.1 C-F)" Select "New orders indices (2000=100)"

A monthly survey of business optimism. The survey asks managers about their purchasing patterns in recent months as well as expected purchases to come. Because managers generally have good insight into the direction of future demand, trends in Bloomberg PMI(R) suggests consumer consumption patterns. As a driving force behind the economy, consumer spending fuels economic growth. Consumer demand can also lead to growing price pressures and inflation. Finally, the Bloomberg PMI comes out a month ahead of government figures that relate to retail sales, so it is the earliest indication of the health of the retail sector.

A headline value above 50 indicates growth, while a value below 50 indicates contraction; the greater the distance from 50, the stronger the effect.

Note: To construct the index, 1000 retailers from the Euro Zone's principal retail economies (Germany, France, and Italy) are surveyed for the report each month. Because these three countries make up over 75% of the Euro Zone's retail sector, retail sales from these three countries are a good measure of the overall health of the Euro Zone retail sector.

Relevance: Rarely affects markets
Release schedule: 9:00 (GMT); monthly, first week of the month
Source of report: Bloomberg (published by NTC Economics LTD)
Web Address: http://www.ntceconomics.com
Address of release:
http://www.prnewswire.co.uk/cgi/news/company?id=85713
AKA: PMI(R)

Construction Production Index - Euro-zone

A measure of construction output and activity in the Euro Zone. Increased construction suggests a growing economy as expensive construction outlays reflect consumer and business optimism. The index is commonly used as a business cycle indicator, as the housing market is closely tied to changes in economic growth. There are two headline figures. The current month's figure adjusted for economic fluctuations that occur throughout the year. And the annualized figured including the full year's data.

Relevance: Rarely affects markets
Release schedule : Quarterly, but member countries are free to release individual data on a monthly basis as well
Source of report : Eurostat
Web Address : http://ec.europa.eu/comm/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer Themes - Industry, Trade and Services > Data tab > Industry and construction > Business trends: Construction
AKA : Construction Output

The value of spending by Euro-zone governments. Euro-zone Government Expenditures is a major component of Euro-zone GDP. However, its release has relatively little market impact since the fiscal policy of Euro-zone governments is usually well-anticipated in advance. Nevertheless, any unexpected change in government expenditures due to unforeseen events can affect to markets.

The headline figure is expressed in billions of Euros.

Relevance: Rarely affects markets
Release Schedule: 9:00 (GMT) ; quarterly, 3 months after the end of a quarter
Source of Report : Eurostat
Web Address: http://ec.europa.eu/comm/eurostat
Address of Release: http://ec.europa.eu/comm/eurostat
Refer > Euro-Indicators - National Accounts > Government final consumption expenditure

Measure of the total value of goods and services produced by Euro-zone nations. GDP is the most comprehensive measure of economic output and provides key insight as to the driving forces in the economy.

Due to this report's lack of timeliness and because data on GDP components are available beforehand, the actual GDP figure is usually well anticipated. But given its overall significance GDP has the tendency to move the market upon release, especially if it upsets expectations. The GDP growth rate serves as a broad indicator for the health of Euro-zone economies. Robust GDP growth signals a heightened level of economic activity, which is generally positive. At the same time, economic expansion raises concerns about inflationary pressure, which can prompt the European Central Bank to increase interest rates. Consequently, positive GDP readings are generally bullish for a given currency, while negative readings are bearish.

The headline figure is the annualized percentage growth rate from the previous quarter. The figure is calculated as

GDP = C + I + G + (EX - IM)
where
C = private consumption
I = private investment
G = government expenditure
EX = exports of goods and services
IM = imports of goods and services

Technical note : GDP is the total market value of goods and services produced in Euro Zone within a given period after deducting the cost of goods and services used up in the process of production. Therefore, GDP excludes intermediate goods and services and considers final aggregates only. The Euro Zone GDP figures are released in seasonally adjusted current prices, seasonally adjusted constant prices, and non-seasonally adjusted constant prices.

Relevance: Tends to move markets on release
Release Schedule : 9:00 (GMT); quarterly, about two months after the quarter
Source of Report : Eurostat
Web Address : http://ec.europa.eu/comm/eurostat
Address of Release : http://ec.europa.eu/comm/eurostat
Refer Euro-Indicators > National Accounts > Gross Domestic Product
A.K.A. GDP

Measure of the amount of goods and services sought by German consumers. This sort of consumption is the largest component of GDP and key to German economic growth. Given that Germany is the largest country in the Euro-zone; its economic activity will be reflected in Euro-zone figures and watched by the European Central Bank. Though Germany is traditionally an export driven economy, the strength of domestic demand can determine whether economic slowdown or growth is in the future.

Increases in Domestic Demand bode well for the economy, suggesting that consumers will demand and purchase more goods locally, fueling business profits and growth. Such growth indicates the strength of the economy and is bullish for the Euro. Uncontrolled growth, however, can raise inflationary risks.

The figure is reported in billion of Euro and also as a percent change.

Relevance: Rarely affects markets
Release schedule: 6:00 (GMT); quarterly, toward the end of the month following reporting quarter
Source of report: Federal Statistical Office of Germany
Web Address: http://www.destatis.de/e_home.htm
Address of release: http://www.destatis.de/basis/e/vgr/vgrtab5.htm
AKA: Aggregate Demand, GDP

Represents household spending on all goods and services. Fluctuations in Private Consumption reflect the country's spending mood. As this figure trends positive it indicates that consumers are stimulating the economy by spending more. However, one cannot size up economic growth solely based on this report. Individuals can increase consumption unsustainably if not matched by income growth.

The report is broken down by consumption categories and consumption per inhabitant. When combined with government spending, business capital spending, export less import and public consumption, Private Consumption can be used to calculate GDP. Private Consumption in itself is not very important, but note that it comes out at the same time as the GDP report which typically causes large market movement. The headline is expressed percentage change.

Relevance: Moderate market impact
Release schedule: 6:00 (GMT); quarterly along with GDP report, toward the end of the month
Source of report: Federal Statistical Office of Germany
Web Address: http://www.destatis.de/indicators/e/iwf01.htm
Address of release: http://www.destatis.de/indicators/e/lrleb03je.htm
AKA: Consumption, Personal Consumption Expenditures, Household Expenditures

Measures the per volume change in output from mining, quarrying, manufacturing, energy and construction sectors in Germany . Industrial production is significant as a short term indicator of the strength of German industrial activity. High or rising Industrial Production figures suggest increased production and economic expansion, healthy for the Euro. However, uncontrolled levels of production and consumption can spark inflation.

The report is only a preliminary estimate figure that does not move the markets much. The figure is released in headlines as a monthly percent change.

Relevance: Rarely affects markets
Release schedule : 10:00 (GMT); monthly, every six weeks after the end of the month
Revisions schedule :
Source of report : Federal Statistical Office Germany
Web Address : http://www.destatis.de/e_home.htm
Address of release : http://www.destatis.de/indicators/e/pgw510ae.htm
AKA : Production Index

Measures the total change in orders placed at domestic manufacturers. The figure gives a picture of the strength of demand for German industrial products. Factory orders are an early indicator of the overall level of spending in the economy, and spending drives economic growth. Although higher German Factory Orders alone is not a strong enough factor to influence the value of Euro in a significant way, growth in orders can put upward pressure on the Euro if higher orders are due to greater demand aboard.

German Factory Orders is a seasonally adjusted index. The headline figure is expressed as a percentage change in the index.

Relevance: Rarely affects markets
Release schedule : 10:00 (GMT); monthly, 6 th of every month
Revisions schedule : Few or no revisions
Source of report : Federal Statistical Office Germany
Web Address : http://www.destatis.de/e_home.htm
Address of release : http://www.destatis.de/indicators/e/tkae211x.htm
AKA : Manufacturing Orders, Orders Received Manufacturing

Measures the total value of German investments in equipment including machinery and construction equipment. Equipment Investment is a part of GDP and released at the same time, therefore changes in the figure directly change overall GDP. But Equipment Investment is also an early indicator for production since companies generally make capital expenditures in a healthy economy when the need to expand operational productivity exists. Because such capital expenditures are sensitive to business conditions, the report can also forecast economic growth or recession. The headline number is the percentage change in Equipment Investment in the reporting quarter.

Relevance: Rarely affects markets
Release schedule: 6:00 (GMT); quarterly, one or two weeks after the release of German GDP
Source of report: Federal Statistical Office of Germany
Web Address: http://www.destatis.de/indicators/e/iwf01.htm
Address of release: http://www.destatis.de/indicators/e/vgr610ae.htm
AKA: Fixed Investment, Machinery and Equipment Capital Formation, Private Investment

Represents public expenditure by the German government. The government budget on spending is determined by fiscal policy. Thus, it is very predictable and rarely, if ever, moves the market upon release.

The headline is expressed in millions of Euros.

Note: The Government Spending figure comes out with the GDP report

Relevance: Rarely affects markets
Release schedule: 6:00 (GMT); quarterly, toward the end of every 3 month
Source of report: Federal Statistical Office of Germany
Web Address: http://www.destatis.de/indicators/e/iwf01.htm
Address of release: http://www.destatis.de/basis/e/fist/fist03_1.htm
AKA: Government Expenditure, Government Purchases, Transfer Payment, Public Finance, Public Expenditure, Public Budget

Gross Domestic Product Quarterly (GDP) - France

The Gross Domestic Product is a comprehensive measure of a France's overall production and consumption of goods and services. GDP serves as one of the primary measures of overall economic well-being. While GDP announcements generally conform to expectations, unanticipated changes in this metric can move markets.

Robust GDP growth signals a heightened level of economic activity and often a higher demand for the domestic currency. At the same time, economic expansion raises concerns about inflationary pressures which may lead monetary authorities to increase interest rates. Thus better than expected GDP figures are generally bullish for the Euro, while negative readings are generally bearish.

Technically, Gross Domestic Product is calculated in the following way:

GDP = C + I + G + (EX - IM)
where
C = private consumption
I = private investment
G = government expenditure
EX = exports of goods and services
IM = imports of goods and services

French GDP figures, officially called Quarterly National Accounts, are released quarterly. The headline figures are annualized percentage changes in real and nominal GDP.

Relevance: Tends to move markets on release
Release schedule: 6:50 (GMT); quarterly, 50 days after the end of the reporting quarter
Revisions schedule: Final report is issued 90 days after the end of the quarter
Source of report: National Institute for Statistics and Economic Studies (France)
Web Address: http://www.insee.fr/en/home/home_page.asp
Address of release: http://www.insee.fr/en/indicateur/cnat_trim/publications.htm
refer to Trade Balance
AKA: Foreign Quarterly National Accounts

Measures the level of production of French industries. French Industrial Production tracks relative changes in the production of goods, excluding energy and food, whether they are sold domestically or abroad. The headline figure is the percentage change in the index from the previous quarter or year.

Industrial Production is highly sensitive to the business cycle, and so can forecast changes in employment, earnings, and personal income. Consequently, Industrial Production is considered a reliable leading indicator of the overall health of the French economy.

Relevance : Rarely affects markets
Release schedule : 6:40 (GMT); monthly, in the first half of the month, with a two month lag.
Revisions schedule : Revisions can be significant
Source of report : National Institute for Statistics and Economic Studies
Web Address : http://www.insee.fr/en/home/home_page.asp
Address of release : http://www.insee.fr/en/indicateur/indic_conj/liste_indice.asp
Refer Industrial Production Index
AKA : Production Index

Confidence and Sentiment Reports

A German Firm, the Center for European Economic Research (ZEW), queries financial experts throughout Europe every month in order to make a medium-term forecast about Germany 's economic situation. They ask experts to evaluate the current situation and to predict the future direction of the economy. For all components of the survey, responses are restricted to positive, negative, or unchanged. This simple structure allows the survey to be quick and efficient in terms of turnaround time, as well as easy to understand and interpret.

German ZEW Indicator of Economic Sentiment
Experts are asked for a qualitative assessment of the direction of inflation, interest rates, exchange rates and the stock market in the next six months. Thus the indicator provides a medium-term forecast for the German economy.

German ZEW Current Situation (Economic Situation)
Unlike the Economic Sentiment Indicator which looks into the future direction of the economy, the Current Situation Indicator focuses on the results of the survey that relate to the current health of the German economy. Expert opinions on whether the current situation is improved, worsened, or unchanged are summarized as the number of positive responses minus the number of negative responses. A higher headline figure indicates a stronger economy and better business climate.

Euro-Zone ZEW Indicator of Economic Sentiment
Assesses future economic expectations for the whole Euro-zone. The results are summarized as the number of positive responses minus the number of negative responses. A higher headline figure indicates a positive expectation for Euro-zone economy.

Technical Note on Headline Number : The results of the survey are always presented as the difference between those experts that optimistic and those are pessimistic. For instance if 25 percent of analysts expect improvement, 35 percent expect decline, and 40 percent expect no change, the headline figure is -10.

Relevance: Tends to move markets on release
Release Schedule : 9:00 (GMT); monthly, in the first half of the same month.
Source of Report : Center for European Economic Research
Web Address : http://www.zew.de/en/
Address of Release :
http://www.zew.de/en/publikationen/
Konjunkturerwartungen/Konjunkturerwartungen.php3
Download historical time series for access to both figures

A measure of the economic outlook for the Euro-zone. As one of the most respected international economic research institutions, the Organization for Economic Co-operation and Development (OECD) releases the Leading Indicator for early signals of economic expansion or slowdown. It takes a number of indicators known to precede changes in growth to serve as a short term forecast of Euro-zone developments. The OECD Leading Economic Index focuses less on how much economies change, but rather on the direction they are moving.

The headline value is expressed in monthly index, with 100 as the base point.

Relevance: Rarely affects markets
Release Schedule : 10:00 (GMT); monthly, roughly 45 days after the reporting period
Source of Report : Organisation for Economic Co-operation and Development
Web Address : http://www.oecd.org/home/
Address of Release: http://www.oecd.org/std/cli
AKA: OECD Composite Leading Indicators, OECD Leading Economic Index

Euro-zone Confidence and Sentiment Indicators - Euro-zone
Based on the results of numerous surveys, these indicators are designed to forecast the direction of the Euro-zone economy. Each indictor is the balance of positive and negative responses. If there are more optimistic responses the headline figure will be positive, while a greater number of negative responses will result in negative figure. The strength of the sentiment can be seen in the magnitude of the figure.

Euro-zone Business Climate Indicator
Gauges current business conditions in the Euro-zone. Based on industrial sector surveys the BCI strives to provide a timely and clear picture of business sentiment in the Euro-zone. A high or rising Business Climate figure generally indicates a healthy economy and business climate; conversely, a low or declining figure signals an unfavorable or worsening economy. As business and consumer confidence increases we typically see similar increases in investments, production, and consumption and economic growth.

Euro-zone Economic Confidence
An overall gauge of sentiment toward the economy in the Euro-zone. The index is a composite of most of the sector specific surveys done by the European Commission. A high or rising level of Economic Confidence indicates healthy levels of purchasing, business spending, and investment - a positive economic outlook conducive to the strengthening of the economy and the Euro.

Reported in the European Commission's Business and Consumer Surveys, economic confidence brings together 5 confidence indicators with different weights: Industrial Confidence (40%), Service Confidence (30%), Consumer Confidence (20%), Construction Confidence (5%), and Retail Trade Confidence Indicator (5%).

Euro-zone Consumer Confidence
Measures consumer sentiment in the Euro-zone nations. The figure is the result of Euro-zone consumer surveys personal finance, the job market, the likelihood of saving and expectations on the economy. High levels of consumer confidence bode well for the economy, indicating consumers are more likely to increase consumption spurring growth and potentially sparking inflation. Conversely, low consumer confidence levels suggest decreased spending.

The figure is determined by the difference between positive and negative answers. Therefore a headline above zero indicates positive consumer confidence, while a negative number shows more negative answers.

Euro-zone Industrial Confidence
A measure of industry sentiment in the Euro-zone nations. Based on a survey among industrial executives, Industrial Confidence asks for production expectations. Specifically the European Commission asks about recent orders and buildup of inventories. Higher levels of industrial confidence indicate a positive outlook for future business spending and capital investment. Despite the fact that manufacturing accounts for only about a quarter of Euro-zone business, industry accounts for most of the volatility in GDP. Thus developments here have significant impact on overall growth in Europe.

The figure is determined by the difference between positive and negative answers. A headline above zero indicates positive industrial confidence, while a negative number shows negative confidence.

Euro-zone Services Confidence
A gauge of business sentiment in the services sector. The figure is derived from a survey asking firms in the service sector about current and expected demand. Since the service sector accounts for roughly two thirds of total Euro-zone GDP, Services Confidence provides an important confirmation of the health for the overall economy. High levels of Services Confidence suggest future upward trends for production and employment.

The figure is determined by the difference between positive and negative answers. Therefore a headline above zero indicates positive service sector confidence, while a negative number shows negative confidence

Relevance: Rarely affects markets
Release schedule: 9:00 (GMT); monthly, during the last week of every month
Revisions schedule: No revisions
Source of report: European Commission, Directorate General for Economic and Financial Affairs
Web Address: http://ec.europa.eu/index_en.htm
Release Addresses: Business Climate
http://ec.europa.eu/economy_finance/indicators/businessclimate_en.htm
All Others http://ec.europa.eu/economy_finance/indicators/
businessandconsumersurveys_en.htm

The Euro-zone Manufacturing Purchasing Managers Index (PMI) assesses business conditions in the manufacturing sector. Because the manufacturing sector represents nearly a quarter of total Euro-zone GDP, the Euro-zone Manufacturing PMI is both a significant and timely indicator of business conditions and the general health of the economy. Results are quantified in an index in which values above 50 indicate an expected increase of business conditions and values below 50 signal an expected deterioration.

Relevance: Rarely affects markets
Release schedule : 9:00 (GMT); monthly, first working day of every month
Source of report : NTC Research
Web Address : http://www.ntc-research.com/
Address of release :
http://www.ntc-research.com/PressCenter/ReleaseDates.asp
AKA : Manufacturing Purchasing Managers Index

The Euro-zone Services Purchasing Managers Index (PMI) assesses business conditions in the services sector. The figure is determined based on monthly surveys of executives in Germany , France , Ireland , Italy and Spain . Combined, these countries account for roughly four fifths of total service sector activity in the Euro-zone. Since services account for two thirds of total Euro-zone GDP, the Services PMI is both a significant and timely indicator of the health of the economy. Higher Service PMI levels suggest upward future trends in output and employment of the industry.

The headline figure is reported an in index where 50 reflects the centerline of boom-bust sentiment. A larger divergence from 50 indicates a larger rate of change in business conditions.

Relevance: Rarely affects markets
Release schedule : 9:00 (GMT); monthly, third working day of every month
Source of report : NTC Research
Web Address : http://www.ntc-research.com/
Address of release :
http://www.ntc-research.com/PressCenter/ReleaseDates.asp
AKA : Services Purchasing Managers Index

One of the country's key business sentiment surveys. The survey is conducted monthly, querying German firms on the current German business climate as well as their expectations for the next six months. As the largest economy in the Euro-zone, Germany is responsible for approximately a quarter of the total Euro-Zone GDP. Consequently, the German IFO is a significant economic health indicator for the Euro-zone as a whole. Positive readings bode well for the economy, suggesting increased consumer spending and economic growth. Conversely, low IFO readings may be indicative of economic slowdown.

The index uses 100 as a centerline between positive and negative outlooks; the further the value is from 100 the stronger the sentiment. The survey presents two equally weighted sub-indices: Current Assessment and Business Expectations.

IFO Current Assessment
Measures current German business conditions, without considering future expectations.

IFO Expectations
Based on firms' expectations for the next six months, where firms rate the future outlook as better, same, or worse.

Relevance: Tends to move markets on release
Release schedule : 8:00 (GMT); monthly, last week of every month
Source of report : CESifo Group
Web Address : http://www.cesifo-group.de
Address of release: http://www.cesifo-group.de/
AKA : Information and Forschung Survey, IFO Business Climate

Consumer Confidence measures the level of confidence households have in economic performance. Generally rising consumer confidence acts as a precursor to higher consumer expenditures which drive economic expansion. The report also breaks down results into parts of the economy, giving a detailed picture of the consumer climate in German. GfK Consumer Confidence is one of the most closely watched surveys.

The survey results are quantified into index where 0 represents long term Consumer Confidence averages. The headline figure is expressed in percentage change.

On a technical note: The German Consumer Confidence survey is conducted monthly by GfK, a market research organization, on behalf of the EU commission. The survey results are obtained monthly based on more than 2000 consumer interviews about their personal spending patterns, inflationary expectations and opinion on economic outlook. Then the aggregate result is categorized by German social groups: students, high/medium/low income and the retired.

Relevance: Rarely affects markets
Release schedule: 6.10 (GMT); monthly, during the last week of every month
Source of report: GfK Group
Web Address: http://www.gfk.com
Address of release: http://www.gfk.com/
AKA: Consumer climate, Consumer mood

Manufacturing Purchasing Manager Index (survey) - German
Gauge for overall performance of the German manufacturing sector. Through asking executives about sales and employment outlook, the survey strives to provide useful information about the business climate that can lead to developments in employment, output and consumption.

The PMI survey results are the result of interviews with business executives. Manufacturing is an important sector in Germany , which is why changes in Manufacturing PMI can provide a good indicator to the overall economic condition in Germany as well as Euro-zone. However, despite the timeliness of the report, Manufacturing PMI is not a big market mover.

The survey results are quantified into index where 0 represents long term manufacturing business conditions. The headline figure is expressed in percentage change.

Relevance: Rarely affects markets
Release schedule: Released during the first half of each month at 3.55 EST
Source of report: NTE Economics
Web Address: http://www.ntc-research.com/
Address of release: http://www.ntc-research.com/Information/AboutPMIData.asp
Refer to Release Date> Press Center. Requires login for new figures
AKA: Purchasing Managers Index, NTC Research PMI

Gauge for the overall performance of the German service sector. The Services PMI interviews German executives on the status of sales, employment, and their outlook. Because the performance of the German service sector is extremely consistent over time, services does not impact final GDP figures as much as the more volatile figure on the manufacturing sector. For this reason Services PMI usually causes little market movement. The survey results are quantified and presented as an index on a 1-100 scale. The headline figure is the percentage change in the index.

Relevance: Rarely affects markets
Release schedule : 7:55 (GMT); month, the first half of each month
Source of report : NTE Economics
Web Address : http://www.ntc-research.com/
Address of release : http://www.ntc-research.com/Information/AboutPMIData.asp
Refer to Release Date> Press Center
AKA : Purchasing Managers Index, NTC Research PMI

A measure of the prevailing sentiment among French business leaders. The Business Confidence Indicator is based on a survey querying expectations for new orders and impressions on the general economic situation. Increasing Business Confidence numbers usually accompany increases in business investment that lead to higher levels of output. The headline figure is the difference between positive and negative responses, as a percentage of the total number of answers, using 100 as the centerline for boom bust sentiment.

Relevance: Rarely affects markets
Release schedule: 6:45 (GMT); monthly, end of every month
Source of report: National Institute for Statistics and Economic Studies (INSEE)
Web Address: http://www.insee.fr/en/home/home_page.asp
Address of release : http://www.insee.fr/en/indicateur/indic_conj/liste_indice.asp

Consumer confidence is a measure of popular sentiment concerning the French economy. The figure is derived from a telephone survey of 2000 of French households that inquires about expenditure patterns and inflationary expectations. In general, rising consumer confidence precedes increased consumer spending, which drives both economic growth and inflation. Thus, d omestic consumer confidence is an important gauge of overall economic activity and inflationary expectations.

The headline figure is the difference between the percentage of positive responses and the percentage of negative answers.

Relevance: Rarely affects markets
Release Schedule: Monthly
Source of Report: ECB
Web Address: http://www.ecb.int/ecb/orga/decisions/genc/html/index.en.html
Address of Release: N/A
AKA : The ECB General Council

Prices, Wages and Sales Figures

CPI is the key gauge for inflation in the Euro Zone. Inflation, simply put, is a decline in the purchasing power of the Euro, where each Euro buys fewer goods and services due to higher consumer prices. The index tracks changes in the price of a basket of goods and services that a typical household might purchase. When the CPI is high, it indicates that significant inflationary pressures exist in Euro Zone economies. This puts pressure on the European Central Bank to raise interest rates. When CPI comes out lower than expected the ECB is expected to lower interest rates, or keep them lower, to encourage economic growth. As a rule, the Bank adjusts rates in order to keep Europe consumer price inflation in the 0 to 2 percent range.

The CPI is also expressed as Core CPI, a similar measure that excludes energy and food in the basket of goods for the reason that items are highly volatile in price and can distort the CPI. Some market participants believe that Core CPI provides a better representation of inflation.

The headline figures for the Euro-zone Inflation Index are a monthly and annualized percentage change.

Note: The index is expressed in percentage terms with the previous year set as the base measurement year. For example, if the index shows 103% in 2006, the HICP has increased by 3% compare to the base year 2005. The overall Consumer Price Index data for the twelve European Union member countries is referred to as the Harmonized Price Index (HICP). Also, all Euro-zone price indices tends to overstate the actual level of inflation because they do not take into account the consumer's ability to substitute less costly goods outside of the CPI basket for goods whose prices have risen inside the basket .

Relevance: Tends to move markets on release
Release Schedule: 9:00 (GMT); monthly, with previous month's data, near the middle of each month
Source of Report: Eurostat/European Central Bank
Web Address: http://www.ecb.int
Address of Release: http://www.ecb.int/
AKA: MUICP, Euro-zone Inflation Index, HICP

Monetary Policy - Money and Interest Rates

The European Central Bank is the central bank of the European Monetary Union member states. The ECB adheres to an inflation target of two percent. Because the ECB is a new central bank that needs to prove itself in financial markets, and because of its institution ties to the German Bundesbank which has historically preferred to err on the side of caution, the ECB is unlikely to risk high inflation in exchange of economic growth.

The ECB president is the voice of the bank and his speeches provide the international investment community with insight into ECB monetary policy. When the President speaks, market participants pay close attention to a number of areas.

Markets focus on what the bank deems as key points that could suggest future interest rate changes. For example, if the speech states that the economy is suffering from high unemployment and stagnant growth but inflation is under control, then financial markets may expect the back to keep rates unchanged to promote growth. Markets will also monitor unemployment and growth in the upcoming period in order to gauge the likelihood of a rate change to come.

Markets also focus heavily on the language used in the President's speech. If the President's is cautious about the inflationary outlook for the economy ("Hawkish"), then the market sees a higher likelihood of future rate increases. Optimism in the President's outlook ("Dovish") would suggest to markets that inflation is in check and that future rate increases are less likely, with the possibility of declines in rates.

Relevance: Tends to move markets on release
Release Schedule : No set time for speeches
Source of Report : European Central Bank
Web Address : http://www.ecb.int/home/html/index.en.html
Address of Release : http://www.ecb.int/press/key/date/previous/html/index.en.html

As a member of the European Central Bank Governing Council, ECB Governors are the voice of the ECB and have voting power in determining future ECB monetary policy. Their speeches are opportunities for markets to better understand their goals for the EU economy and monetary policy, as well as the stance Governors take on significant economic issues.

Although one Governor has limited impact on the ECB, markets pay close attention for any insight of how the Governor will vote and what stance the Governor's country may hold regarding controversial ECB policies.

Relevance: Tends to move markets on release
Release Schedule : No set time for speeches
Source of Report : European Central Bank
Web Address : http://www.ecb.int/home/html/index.en.html
Address of Release : http://www.ecb.int/press/key/date/previous/html/index.en.html

As Chief Economist and member of the Executive Board for the European Central Bank, the research and views of the ECB Chief Economist have significant influence in determining the future of European Union monetary policy. As a member of the Executive Board, he or she takes part in implementing monetary policy for the EU and managing day to day operations for the ECB.

The Chief Economist's speech is an opportunity to better understand what his or her goals are in managing the ECB, changes in the bank's policies, and what stance he or she may take on controversial economic issues. For example, if a speech stated that the ECB were concerned about inflationary pressures, market would pay close attention to early inflationary indicators and look forward to likely rate hikes to come.

Relevance: Tends to move markets on release
Release Schedule : No set time for speeches
Source of Report : European Central Bank
Web Address : http://www.ecb.int/home/html/index.en.html
Address of Release : http://www.ecb.int/press/key/date/previous/html/index.en.html

EU Finance Ministers Meet monthly to discuss the current economic status of the Euro Zone. EU Finance Ministers are made up of representatives from all EU nations. They discuss goals and concerns each country may have regarding trade or political issues. The markets mostly care about the rhetoric the Finance Ministers use to influence the European Central Bank, of which they do not have direct control. Through analyzing the rhetoric usage in their speeches one gets a gauge to how the country, represented by the Finance Minister, would prefer monetary policy to head. The voices of EU Finance Ministers have serious implications to monetary policy since their speeches may influence ECB monetary policy decisions.

Note: ECB tries to make monetary policy decisions that benefit the whole Euro-zone in general. Specific member country's interests' addressed in EU Finance Minister Meeting are considered by the Central Bank, but they are not supposed to be the driving force to monetary policy changes.

Relevance: Tends to move markets on release
Release Schedule: Monthly
Source of Report: European Central Bank
Web Address: N/A
Address of Release: N/A

The broadest measure of money supply in use by Euro-zone nations. It includes all currency in circulation, bank deposits, repurchase agreements, debt securities up to 2 years, and the value of money market shares. A larger money supply reduces the purchasing power of the Euro and puts downward pressure on the exchange rate. However, because an increase in M3 leads to price inflation, this figure can also be indicative of the likelihood of future interest rate hikes. The Euro-zone M3 is reported in headlines as a percent change from the previous month or as a Three Month Average, which smoothes monthly volatility in the money supply.

Relevance: Rarely affects markets
Release Schedule: Monthly
Source of Report: EU Central Bank
Web Address: http://www.ecb.int/home/html/index.en.html
Address of Release: http://www.ecb.int/pub/mb/html/index.en.html
AKA: Euro-zone money supply

Employment

Reports the cumulative percentage of unemployed individuals in the Euro-zone nations.

A low or falling unemployment rate is associated with increased expenditure, given that more people are employed and have incoming wages. Increased expenditure encourages economic growth, which can spark inflation. The figure acts as a significant indicator of the region's economic activity, particularly because it is released earlier than the GDP. However, because unemployment rates for member countries are released well before the aggregate Euro-zone rate, the figure often receives less attention.

Note : The figure is calculated by dividing the number of unemployed individuals in the labor force by the total labor force, yielding a percentage measure. Persons are considered unemployed if they are15 years or older and without a job, but have actively sought employment in the past 4 weeks and are willing and able to work in the next 2 weeks.

Relevance: Moderate market impact
Release schedule : 9:00 (GMT); monthly, two months after the reported month, first week of every month
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer Structural indicators > Employment
AKA : Euro-zone Unemployment

Euro-zone Labor Costs captures employers' total cost of employing a labor force. Rising labor costs are viewed as an indicator of forthcoming inflation, which can drive up interest rates.

Unit labor costs (labor costs divided by output) is a figure used to gauge productivity; higher levels of productivity lower unit labor costs and visa versa. Higher levels of productivity effectively allow one worker to produce more. Labor costs include gross wages and salaries, social contributions by employers and taxes remaining after all subsidies related to employment. Measured on an hourly basis, the figure is calculated as a percent changer per quarter.

Relevance: Rarely affects markets
Release schedule : 9:00 (GMT); quarterly, three months after the quarter, near the middle of the month
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer Euro-Indicators - Labour market > Labour cost index - quarterly data
AKA : Euro-zone Unit Labor Costs, Euro-zone Cost of Labor

Measures the change in the number of employed individuals in the German labor force. Employment is a significant economic indicator to watch, particularly because Germany is the largest economy in the Euro-zone. A positive or rising Employment Change has positive implications for consumer spending as more workers are receiving paychecks. While increased consumer spending spurs economic growth, uncontrolled spending raises inflationary risks.

Although Employment Change is released monthly, it generally moves the market only modestly due to seasonal volatility. Thus, Employment Change gives the most insight when considered in the long term.

The headline is expressed in employment change in thousands.

Note: A high or rising Employment Change figure should not be assumed to correlate to decreasing unemployment, as such would not be the case if the labor force growth matches or outpaces Employment Change.

Relevance: Rarely affects markets
Release schedule : 7.55 (GMT); Irregular release schedule, mostly monthly release
Source of report : Federal Statistical Office Germany
Web Address : http://www.destatis.de/e_home.htm
Address of release : http://www.destatis.de/indicators/e/tkarb810.htm
AKA : Employment Situation, Employment Rate, ILO labor market statistics

The percentage of individuals in the labor force who are without a job but actively seeking one. A higher Unemployment Rate is generally a drain on the economy. Not only does it mean that resources are not being fully utilized, but it also results in lower consumer spending as there are fewer workers receiving paychecks.

Note: The unemployment rate generally moves slowly, so changes of only a few tenths of a percent are still considered significant. Also note that the unemployment rate does not account for discouraged workers. Therefore, in an economically depressed environment, such as that which occurred in Cold War era East Germany , the Unemployment Rate may not accurately reflect the extent of problems.

Relevance: Rarely affects markets
Release schedule : 7.55 (GMT); irregular release schedule, mostly monthly
Source of report : Federal Statistical Office Germany
Web Address : http://www.destatis.de/e_home.htm
Address of release : http://www.destatis.de/indicators/e/arb420ae.htm
AKA : Employment Situation, UE Rate, ILO labor market statistics

The percentage of individuals in the labor force who are without jobs but are actively seeking work. A higher number of unemployed persons is generally a drain on the economy. Not only does it mean that resources are not being fully utilized, but it also results in lower consumer spending as there are fewer workers receiving paychecks.

The unemployment rate generally moves slowly, so changes of only a few tenths of a percent are still considered significant. Also note that the unemployment rate does not account for discouraged workers who have given up looking for work. Therefore, in an economically depressed environment the Unemployment Rate may not reflect the severity of economic conditions accurately.

The headline figures are the nominal and seasonally adjusted percentage of Unemployment Rate. The seasonal adjusted figure provides a more truthful read on France 's employment situation.

Note: Discouraged workers who are not actively seeking work are not included in labor force.

Relevance: Rarely affects markets
Release schedule : 6:45 (GMT); monthly, at the end of the following month
Source of Report: National Institute for Statistics and Economic Studies ( France )
Web Address : http://www.insee.fr/en/home/home_page.asp
Address of release : http://www.insee.fr/en/indicateur/indic_conj/liste_indice.asp
Refer Unemployment and Jobs
AKA : Employment Situation

Housing

A measure of construction output and activity in the Euro Zone. Increased construction suggests a growing economy as expensive construction outlays reflect consumer and business optimism. The index is commonly used as a business cycle indicator, as the housing market is closely tied to changes in economic growth. There are two headline figures. The current month's figure adjusted for economic fluctuations that occur throughout the year. And the annualized figured including the full year's data.

Relevance: Rarely affects markets
Release schedule : Quarterly, but member countries are free to release individual data on a monthly basis as well
Source of report : Eurostat
Web Address : http://ec.europa.eu/comm/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer Themes - Industry, Trade and Services > Data tab > Industry and construction > Business trends: Construction
AKA : Construction Output

Measures total expenditure on buildings and structures in Germany , is a major part of the investment component of GDP. Like any capital expenditure, Construction Investment reflects the economy's overall well-being. Investments are usually made when economic sentiment is positive and investors expect that future economic growth will make their outlays worthwhile. Additionally, increased investment spending is likely to have spillover effects down the line; for instance, machine investment will yield subsequent benefits for productivity.

While such effects make Construction Investment useful, the report is not very timely, and thus has limited market impact. The figure is reported as percent change in prices from the previous year.

Note: Construction Investment report comes out at the same moment as GDP report.

Relevance: Rarely affects markets
Release schedule: 6:00 (GMT); quarterly
Source of report: Federal Statistical Office of Germany
Web Address: http://www.destatis.de/indicators/e/iwf01.htm
Address of release: http://www.destatis.de/indicators/e/vgr610ae.htm
AKA: Fixed Investment, Construction Capital Formation, Private Investment

The rate of growth in housing construction, usually expressed as a year on year percentage change. The number of housing starts is an indicator of the strength of the construction sector. Also, due to the multiplier effect purchases of homes has on the rest of the economy, Housing Starts serves as a leading indicator for overall growth. Because of real estate's sensitivity to interest rates, Starts respond quickly to changes in the business cycle, slowing at the onset of a recession and rapidly growing at the beginning of an economic boon.

Relevance: Rarely affects markets
Release schedule: 6:45 (GMT); monthly, first week of every month, two months after the report period
Source of report: National Institute for Statistics and Economic Studies (INSEE)
Web Address: http://www.insee.fr/en/home/home_page.asp
Address of release: http://www.insee.fr

The European Central Bank's decision to increase, decrease, or maintain interest rates. Controlling interest rates is the key mechanism of monetary policy, and the ECB influences interest rates by first changing the "overnight rate" through the purchase or sale of government bonds. Lowering rates can spur economic growth but may incite inflationary pressures. On the other hand, increasing rates slows inflation but can stymie growth.

The European Central Bank makes a concerted effort to be transparent in its policy. Frequent speeches by Bank Governers make policy goals clear and the Bank adheres to a stated inflation target of 2 percent, changing rates accordingly to meet that goal. Because of this, rate decisions are generally well anticipated, but very important nonetheless.

The ECB's rate decision has an enormous influence on financial markets. Because the ECB interest rate is essentially the return investors receive while holding Euros, changes in rates affect the exchange rate of the Euro.

Because rate changes are usually well anticipated, the actual decision does not tend to impact the market. But if the ECB changes rates they will hold a press conference where some rationale for the decision is offered. Market participants pay close attention to the press conference, hoping to clue in on the likelihood of further rate changes. Often, the language used in the press conference holds important signals to how ECB feels about inflation and the economy. The ECB President's language will be "hawish" if he is pessimistic about the inflation outlook for the economy. In that case, the market sees a higher chance of future rate hike. Conversely, if the ECB President believes inflation is in check, his remarks will be "dovish," and the market perceives a future rate increase to be unlikely.

Relevance: Tends to move markets on release
Release schedule : About 7:30 AM EST, the Governing Council meets twice a month
Source of report : European Central Bank
Web Address : http://www.ecb.int/home/html/index.en.html
Address of release : http://www.ecb.int/press/pressconf/2006/html/index.en.html
AKA: ECB Monetary Policy, Target Overnight Rate, Key Interest Rate, Key Interest Policy Rate

An early estimate of Euro-zone inflation. The figure uses available data in conjunction with historical trends to forecast the CPI for the Euro-zone. CPI itself measures the changes in price of a fixed basket of consumer goods and services; a positive CPI indicates price inflation. CPI estimates have a similar effect as to official CPI releases; higher values suggests rising interest rates and a strengthening Euro, while lower values can mean lower interest rates and a falling Euro. Although this is more timely than the actually headline inflation number, Euro-Zone CPI, it is also less absolute in its findings.

Relevance: Moderate market impact
Release schedule : 9:00 (GMT); monthly
Source of Report : Eurostat
Web Address : http://ec.europa.eu/comm/eurostat
Address of release : http://ec.europa.eu/eurostat
Publications > News Release > Euro Area Inflation Estimated
AKA: CPI Estimate

Measures changes in the selling prices of goods and services used by Euro-zone producers. Because producers tend to pass on higher costs to consumers as higher retail prices, the PPI is an early indicator of inflation. A higher PPI, especially when combined with high figures for other measures of inflation, will make the European Central Bank more inclined to raise interest rates. A low or falling PPI is indicative of declining prices, and may suggest an economic slowdown.

The Index headline is expressed as a month over month or annualized percentage change.

Note: The Euro-zone PPI excludes construction industry because it is vulnerable to seasonal price volatility that can distort index results.

Relevance: Moderate market impact
Release Schedule: 11:00 (GMT); monthly, near the middle of each month, with previous month's data
Source of Report: Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer Euro-Indicators "Industry, Commerce and Services" > Industrial domestic output prices > Industrial domestic output prices - Total industry excluding construction - quarterly data
AKA: Industrial domestic output prices

Euro-zone Labor Costs captures employers' total cost of employing a labor force. Rising labor costs are viewed as an indicator of forthcoming inflation, which can drive up interest rates.

Unit labor costs (labor costs divided by output) is a figure used to gauge productivity; higher levels of productivity lower unit labor costs and visa versa. Higher levels of productivity effectively allow one worker to produce more. Labor costs include gross wages and salaries, social contributions by employers and taxes remaining after all subsidies related to employment. Measured on an hourly basis, the figure is calculated as a percent changer per quarter.

Relevance: Rarely affects markets
Release schedule : 9:00 (GMT); quarterly, three months after the quarter, near the middle of the month
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer Euro-Indicators - Labour market > Labour cost index - quarterly data
AKA : Euro-zone Unit Labor Costs, Euro-zone Cost of Labor

The broadest measure of money supply in use by Euro-zone nations. It includes all currency in circulation, bank deposits, repurchase agreements, debt securities up to 2 years, and the value of money market shares. A larger money supply reduces the purchasing power of the Euro and puts downward pressure on the exchange rate. However, because an increase in M3 leads to price inflation, this figure can also be indicative of the likelihood of future interest rate hikes. The Euro-zone M3 is reported in headlines as a percent change from the previous month or as a Three Month Average, which smoothes monthly volatility in the money supply.

Relevance: Rarely affects markets
Release Schedule: Monthly
Source of Report: EU Central Bank
Web Address: http://www.ecb.int/home/html/index.en.html
Address of Release: http://www.ecb.int/pub/mb/html/index.en.html
AKA: Euro-zone money supply

The total value of goods and services sold each month at retail outlets. The report acts as a gauge of consumption and consumer confidence. An increasing number of sales signal consumer confidence and economic growth, which would fuel the Euro-zone economy. However, higher consumption also leads to inflationary pressures, which results in economic instability. The headline is the monthly percentage change in retail sales.

Notes : Retail trade is where goods are purchased primarily to be resold to the consumer or end-user. The Retail Trade figure tracks the value of turnover in retail trade by calculating the sum of invoice totals in the reporting month.

Relevance : Tends to move markets on release
Release schedule : 9:00 (GMT); monthly, one month following the reporting month
Revisions schedule : Data is revised monthly to adjust for previously unavailable data from some member countries
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer Long-term indicators > Industry, Trade and Services > European Business - Selected indicators for all activities (NACE divisions) > Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods > Retail trade, except of motor vehicles and motorcycles; repair of personal and household goods
AKA : Retail Trade Turnover Index, Retail Sales

Tracks the number of cars registered for the first time in the Euro Zone. Consumption of expensive items such as automobiles is a large part of EU GDP, thus sales of new motor vehicles and other "big-ticket" items reflect consumers' optimism and propensity to spend. In addition to clues on consumer sentiment, the Euro-zone economy directly benefits from large outlays. Manufacturing, finance and retail all directly gain from higher auto sales.

The headlines are the monthly and annual percentage change in the new car registration index.

Relevance: Rarely affects markets
Release Schedule : 6:00 (GMT); monthly, usually 15 days after the reporting period
Source of Report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of Release : http://ec.europa.eu/comm/eurostat
Refer Euro-Indicators - Industry, Commerce and Services > Retail Trade > New car registrations

Assesses changes in the cost of living by measuring changes in the prices of consumer items. The CPI is the headline inflation figure that indicates the strength of domestic inflationary pressures. Simply put, inflation reflects a decline in the purchasing power of the Euro in Germany , where each Euro buys fewer goods and services. CPI is the most popular way to measure changes in purchasing power. The report tracks changes in the price of a basket of goods and services that a typical German household might purchase. An increase in the index indicates that it takes more Euros to purchase this same set of basic consumer items.

The German CPI is significant as one of the primary gauges of inflation. As the largest Euro-zone economy, inflation in Germany will contribute significantly to inflation in the Euro-zone and the behavior of the European Central Bank. High or rising inflation acts as a signal to the ECB to raise interest rates, an action which will result in the strengthening of the Euro. The headline figure for CPI is the percentage change in monthly and annualized percentage term.

CPI Core
The CPI is also expressed as Core CPI, a similar measure that excludes energy and food in the basket of goods. The market typically pays more attention to the Core CPI, because its exclusion of volatile goods like food and energy avoids CPI distortion, giving a clearer picture of German inflation.

Relevance: Tends to move markets on release
Release Schedule: 6:00 (GMT); monthly
Source of Report: Federal Statistical Office Germany
Web Address: http://www.destatis.de/
Address of Release: http://www.destatis.de/indicators/e/vpi101ae.htm
AKA: HICP, Harmonized CPI

The weighted average of prices for a predetermined basket of consumer goods and services. This basket is representative of the goods and services that the average German household purchases. The CPI takes into account the relative importance of each item in the basket and creates a weighted average of the prices. Consumer Prices are compared to previous figures to gauge changes in the cost of living over time. The headline number is released as the percentage change from the previous quarter or year.

The German CPI is estimated based on the CPI results from the six German states (Saxony, Baden Wuerttemburg, Brandenburg , North Rhine-West, Bavaria , and Hesse ).

NOTE : However, it is worth noting that the Free State of Saxony is probably the most significant region to consider. It is listed as "Objective 1" development region by the European Union and it can receive up to 30% in investment subsidies until 2013. That is why Saxony CPI tends to hold a greater significance than other states. Also, keep in mind that the Germany economy is by far the largest in the European region. So, the German CPI provides very useful insight in determining overall Euro-zone inflationary pressures.

Relevance: Tends to move markets on release
Release Schedule: 6:00 (GMT); monthly, first week of the month
Revision Schedule: 6.00 (GMT); between 10th to 15th of every month
Source of Report: Statistische Ämter des Bundes und der Länder
Web Address: http://www.statistik-portal.de/Statistik-Portal/
Address of Release: http://www.statistik-portal.de/Statistik-Portal/en/en_inhalt21.asp

Measures the change in the prices paid by domestic producers. Producer prices, also known as factory gate prices, are those charged by producers usually before retail, consumer markets. Increases in German Producer Prices act as an early indicator of inflation, as higher producer prices may be passed to consumers in the form of higher retail prices. Rising inflation is significant, especially coming from the largest economy in the Euro-zone. German inflation will contribute to Euro-zone figures, and may be checked by increasing interest rates.

The headline is expressed as percentage change in the Producer Price Index.

Note: German PPI excludes volatile items, such as energy components and seasonal food, in order to provide a more accurate picture of price developments.

Relevance: Moderate market impact
Release Schedule: 6:00 (GMT); monthly, near the twentieth of every month, with previous month's data,
Source of Report: Federal Statistical Office Germany
Web Address: http://www.destatis.de/
Address of Release: http://www.destatis.de/themen/e/thm_preise.htm
Refer to Producer price indices
AKA: Industrial domestic output prices

Measures changes in the prices paid by retailers for finished goods. Growth in wholesale prices usually precedes increases in retail prices, thus changes in Wholesale Prices can be used as an early indicator for inflation. While the CPI records price changes for retail goods, the WPI might pick up inflationary pressures before they reach the headline retail CPI report. The headline number is the percentage change in the index.

Note: WPI provides seasonally adjusted price changes to account for goods' seasonally volatility.

Relevance: Rarely affects markets
Release Schedule: 6:00 (GMT); previous month's data, second week of every month
Source of report: Federal Statistical Office of Germany
Web Address : http://www.destatis.de/e_home.htm
Address of release : http://www.destatis.de/indicators/e/tkpre560.htm
AKA : WPI

Measures the change in prices for goods imported by Germany . The Import Price Index is important in distinguishing changes in trade volume versus changes in trade prices. Whereas growth in import volume suggests stronger consumer demand and economic expansion, growth in import prices suggests higher production costs and inflationary pressures. Only when growth in import volume is also complemented by stable import prices can it be indicative of real economic growth.

The headlines are the monthly and annual percentage change in the index.

Relevance: Rarely affects markets
Release schedule : 6.00 (GMT); monthly, near the end of the every month
Revisions schedule : Unknown
Source of report : Federal Statistical Office Germany
Web Address : http://www.destatis.de/e_home.htm
Address of release : http://www.destatis.de/indicators/e/tkpre530.htm
AKA : The Index of Import Prices

Measures changes in sales of the German retail sector. Given that consumption makes up a significant portion of German GDP, the Retail Sales figure can act as an indicator of domestic demand. High or rising Retail Sales may spur German consumption, translating into economic growth. However, uncontrolled growth runs the risk of inflationary pressures. Since Germany is a large part of the Euro-zone, German figures may have some impact on the market.

The headline figure is expressed in percentage change in the value of sales.

Relevance: Moderate market impact
Release schedule : Usually 9:30 (GMT); monthly, more than a month after
Revisions schedule : Few
Source of report : Federal Statistical Office Germany
Web Address : http://www.destatis.de/e_home.htm
Address of release : http://www.destatis.de/indicators/e/tkums331x.htm
AKA : Retail trades, Retail trades turnover

Assesses changes in the cost of living by measuring changes in the prices of consumer items. The CPI is the headline inflation figure that indicates the strength of domestic inflationary pressures. Simply put, inflation reflects a decline in the purchasing power of the Euro in France , where each Euro buys fewer goods and services. CPI is the most popular way to measure changes in purchasing power. The report tracks changes in the price of a basket of goods and services that a typical French household might purchase. An increase in the index indicates that it takes more Euros to purchase this same set of basic consumer items.

Because France is a large member of the European monetary union the value of Euro is sensitive to French CPI. If CPI comes out much higher than expected it may encourage the ECB to raise interest rates which would lead the Euro to appreciate. The opposite may occur when the CPI comes out lower than expected.

Relevance: Tends to move markets on release .
Release Schedule: 6:00 (GMT); Monthly, in the middle of the following month
Revision Schedule: Little or no revisions
Source of Report: National Institute for Statistics and Economic Studies ( France )
Web Address : http://www.insee.fr/en/home/home_page.asp
Address of Release : http://www.insee.fr/en/indicateur/indic_cons/indic_cons.asp
AKA : CPI

Measures changes in producer prices. Producer prices, also known as "factory gate" prices, are those charged by producers usually before markets. Increases in French Producer Prices act as an early indicator of inflation, as higher producer prices may be passed to consumers in the form of higher retail prices. Rising inflation is often checked by increasing interest rates, which would strengthen the Euro.

The headline is the percentage change in the index from the previous month and year. The French Producer Price Index relies on the weighted average of a basket of 24,000 goods from 4,200 firms, compared to base year values.

Relevance : Moderate market impact
Release Schedule : 6:45 (GMT); monthly, at the end of the following month
Source of report : National Institute for Statistics and Economic Studies
Web Address : http://www.insee.fr/en/home/home_page.asp
Address of release :
http://www.insee.fr/en/indicateur/indic_conj/liste_indice.asp
Refer Industrial Product Price Indices
AKA : Industrial Product Price Indices