One subject
Economic data
9 lessons, 48 glossary terms and 32 market guides cover this across the academy. Each one links to its own page, and nothing is repeated here.
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The curriculum
9 lessons cover this.
In curriculum order, which is the order you would meet them.
- The New York sessionModule 06When the market moves6 min
- What macro means for a traderModule 08Macro and the calendar7 min
- What inflation is and why it moves marketsModule 08Macro and the calendar8 min
- How to read the economic calendarModule 08Macro and the calendar14 min
- Expectations against actualModule 08Macro and the calendar7 min
- Revisions and why the first print is not the truthModule 08Macro and the calendar7 min
- Volatility around events is a risk topic firstModule 08Macro and the calendar8 min
- Oil as a regional macro driverModule 08Macro and the calendar9 min
- What market sentiment and positioning describeModule 08Macro and the calendar9 min
The glossary
48 terms belong here.
Alphabetical, each defined in one sentence on its own page.
- Balance of tradeThe value of a country's exports of goods and services less the value of its imports over the same period, published by its statistics agency on a monthly or quarterly cycle.
- Basis pointOne hundredth of one percentage point, used so that a change in a rate, a yield or a fee can be stated without the ambiguity the word percent carries.
- Bond yieldThe return a bond offers at its current market price, which moves in the opposite direction to that price and is the figure macro comparisons use rather than the fixed coupon.
- Commitment of Traders reportThe Commitment of Traders report is a weekly breakdown of open interest in United States futures markets by category of participant, published each Friday for positions held the previous Tuesday.
- Consensus forecastA consensus forecast is the central estimate of a survey of economists taken before a data release, and it is the number an outcome is judged against rather than the previous reading.
- Consumer price index (CPI)The consumer price index measures the average change in the prices households pay for a fixed basket of goods and services, and it is the most watched inflation release.
- Core inflationCore inflation is a price index calculated with the most volatile components removed, usually food and energy, published so that a persistent trend can be read without the noise those components add.
- DeflationA sustained fall in the general price level, which raises the real value of money and of existing debt, and which central banks treat as harder to reverse than inflation.
- Earnings seasonEarnings season is the concentrated few weeks after each quarter ends in which most listed companies publish results, so scheduled single-share volatility clusters into a short window.
- Economic calendarAn economic calendar lists scheduled data releases, central bank decisions and official speeches with their exact release times, the previous reading and the consensus estimate for each.
- Economic indicatorAn economic indicator is a published statistic describing part of an economy, such as output, prices, employment or sentiment, on a fixed schedule and a defined methodology.
- Federal funds rateThe rate at which banks in the United States lend reserve balances to one another overnight, and the rate the Federal Reserve steers as its main instrument of monetary policy.
- Federal Open Market Committee (FOMC)The committee inside the United States Federal Reserve that sets the target range for the federal funds rate and directs the central bank's holdings of securities.
- First printA first print is the initial published estimate of an economic statistic, produced against a deadline from incomplete source data and expected to be restated as the remaining data arrives.
- Fiscal breakeven priceA fiscal breakeven price is the oil price at which an oil exporting government's revenue covers its planned spending, which converts a commodity price into a statement about that state's budget.
- Fiscal policyA government's use of taxation, spending and borrowing to influence demand in its own economy, decided by the finance ministry and the legislature rather than by the central bank.
- Fundamental analysisStudy of the economic and financial facts behind a price, from interest rates and growth to company earnings and physical supply, aimed at an estimate of what an instrument is worth.
- Gross domestic product (GDP)Gross domestic product measures the total value of goods and services produced within a country over a period, the broadest single reading of whether an economy grew or shrank.
- InflationInflation is the rate at which the general level of prices rises over time, reported as the percentage change in a basket index against the same month a year earlier, and it is the variable most central bank mandates are written around.
- Investment gradeInvestment grade is the band of credit ratings covering borrowers an agency judges least likely to default, running from the top rating down to BBB minus or its equivalent, with everything below it classed as high yield.
- ISM manufacturing indexThe ISM manufacturing index is a monthly survey of United States purchasing managers in which a reading above fifty says more firms reported expansion than contraction in the month just ended.
- Jobless claimsJobless claims count applications for unemployment insurance in the United States, published every Thursday, which makes them the most frequent regular reading available on a labour market.
- JOLTS reportPublished monthly by the US Bureau of Labor Statistics, the JOLTS report counts job openings, hires, quits and layoffs, describing a month that the payrolls release has already covered.
- Leading indicatorA leading indicator is one whose changes have historically arrived before the thing it describes, whether that is a turn in the economy or a turn on a price chart.
- Monetary policyMonetary policy is how a central bank steers credit conditions in its economy, mainly by setting a policy rate and by operating on the size of its balance sheet.
- Non-farm payrollsNon-farm payrolls counts the jobs added or lost across the United States economy outside farming, published monthly by the Bureau of Labor Statistics and watched closely across every market.
- NowcastingNowcasting estimates the present state of an economy from data that arrives faster than the official statistic, updating the estimate mechanically as each new release lands.
- OPECOPEC is the Organization of the Petroleum Exporting Countries, a group of oil producing states that coordinates production quotas among its members in order to influence the oil price.
- Producer price index (PPI)The producer price index measures the change in prices received by domestic producers for their output, which places it earlier in the chain than the prices households eventually pay.
- Purchasing managers index (PMI)A purchasing managers index converts a monthly survey of firms into a single diffusion reading, where the fifty mark separates a majority reporting improvement from a majority reporting deterioration.
- Purchasing power parityPurchasing power parity is the proposition that an exchange rate settles where an identical basket of goods costs the same in two countries once converted at that rate.
- Quantitative easingQuantitative easing is a central bank's purchase of government bonds with newly created reserves, used to push longer term interest rates down once its policy rate is near its floor.
- Quarterly earningsQuarterly earnings are a listed company's three monthly report of revenue, profit and guidance, released on a scheduled date that is routinely the most volatile session in that share's quarter.
- Rate decisionA rate decision is the scheduled announcement in which a central bank's committee sets its official policy rate, published alongside a statement that explains the vote and frames what the committee expects next.
- RecessionA recession is a broad and sustained decline in economic activity, popularly reported as two consecutive quarters of falling output but formally dated on a wider set of measures than output alone.
- RevisionA revision is a statistical agency's restatement of a figure it has already published, made as further source data arrives, and it is scheduled rather than an admission that the earlier number was wrong.
- Sentiment analysisSentiment analysis reads what participants already hold and expect, using surveys, futures positioning reports, options pricing and broker position data, rather than reading price or company fundamentals.
- Sovereign debtSovereign debt is borrowing by a national government, issued as bills and bonds whose yields become the reference rate against which almost everything else priced in that currency is measured.
- StagflationStagflation is the combination of stagnant growth, rising unemployment and persistent inflation at the same time, a mix that leaves a central bank with no single response that improves both problems.
- Stock splitA stock split multiplies the number of a company's shares and divides the price by the same factor, so the value of a holding is unchanged while the price of one share falls.
- Treasury yieldA Treasury yield is the annual return implied by the price of a United States government security, and because price and yield move in opposite directions, a falling yield means a rising bond.
- UndervaluedUndervalued describes a market whose price sits below an estimate of what it is worth, where that estimate is the output of a valuation method rather than anything observable on a screen.
- Unemployment rateThe unemployment rate is the share of a country's labour force that is without work and actively looking for it, measured by a household survey and published on a fixed monthly calendar.
- Year on yearA year on year figure compares a reading with the same period twelve months earlier, which cancels any pattern that repeats annually and is the form most inflation and growth headlines are quoted in.
- YieldYield states the income a holding pays over a year as a percentage of what it costs, so the same unchanged payments produce a higher yield whenever the price of the holding falls.
- Yield curveA yield curve plots the yields of one issuer's bonds against how long each has left to run, so its shape shows what the market charges to lend to the same borrower for longer.
- Yield curve inversionA yield curve inverts when a longer dated bond yields less than a shorter dated one from the same issuer, most often the ten year yield falling below the two year.
- Yield spreadA yield spread is the difference between two yields, quoted in basis points, and it isolates whatever separates the two securities, such as credit risk, country risk or the distance between two maturities.
The market guides
32 guides answer a question about it.
Standalone reference answers, entered laterally rather than worked through.
- What moves a currency pairMarketsThe channels that reprice a rate, why every move has two possible sources, and where that framework stops.
- The US dollar and the dollar indexMarketsWhy the dollar sits on one leg of most pairs, what the index measures, and how its basket is weighted.
- Commodity currenciesMarketsWhich currencies the market groups this way, the terms-of-trade link, and why that link is unstable.
- What an index measuresMarketsThe base date, the divisor that holds a series continuous, and what an index level cannot report.
- Index weighting methodsMarketsCapitalisation, free float, price and equal weighting compared, and what each does to concentration.
- US indicesMarketsWall Street 30, US 500, US Tech 100 and US Small Cap 2000: coverage, weighting and trading hours.
- What moves an indexMarketsEarnings expectations, the discount rate, the risk premium, sector mix, currency and index flows.
- How the crude oil market works: Brent and WTIMarketsWhat Brent and WTI each specify, why two benchmarks exist, and what their differential measures.
- How the natural gas market worksMarketsWhy regional gas prices diverge, the injection and withdrawal cycle, and what the storage report shows.
- How refined energy products tradeMarketsWhat gasoline, heating oil and ethanol specify, and the crack spread that expresses a refining margin.
- How the industrial metals market worksMarketsWhat copper, aluminium, zinc and nickel are used for, and the exchange system that prices them.
- How the grains market worksMarketsThe planting and harvest calendar, the acreage competition between crops, and what moves them.
- What moves commodity pricesMarketsThe drivers common to every commodity: inelastic supply, inventory, the dollar, energy, weather and policy.
- US sharesMarketsThe venues, the session structure, the reporting calendar and the settlement conventions for US shares.
- What moves a share priceMarketsThe four forces that reach a share price, and why a reaction depends on the expectation before it.
- What moves an ETF priceMarketsThe two layers behind every move in a fund's price, and the events that move it mechanically.
- How the economic calendar worksEventsWhat sits on the calendar, who publishes each item, and how its three number columns are built.
- The FOMC and the Federal Reserve rate decisionEventsWho sits on the FOMC, what a rate decision decides, and the four documents a meeting produces.
- US CPI, the consumer price indexEventsWhat the CPI basket contains, how it is collected and weighted, and why headline and core readings differ.
- US non-farm payrolls and the employment reportEventsThe two surveys behind one report, and why the payroll count and the unemployment rate can disagree.
- US GDP and the quarterly national accountsEventsWhat the national accounts measure, why the headline is annualised, and how the three estimates differ.
- US ISM and PMI business surveysEventsHow a diffusion index is built, why its neutral level is the only reference point, and where it misleads.
- US retail sales and the control groupEventsWhat the survey covers, why the headline is nominal, and the exclusions that produce the control group.
- Euro area inflation and the harmonised indexEventsWhy the euro area needs a harmonised index, what harmonisation standardises, and how the estimates differ.
- Euro area PMI and the flash release sequenceEventsHow the survey family is structured, the order the flash readings arrive in, and the limits of a survey.
- UK inflation and labour market dataEventsThe difference between CPI, CPIH and the retail prices index, and how the labour release is assembled.
- The People's Bank of China and China activity dataEventsHow the People's Bank of China signals policy, how the daily fixing works, and what the monthly data covers.
- OPEC+ meetings and the production quotaEventsWho is in the group, how it decides, and the difference between a headline quota and actual production.
- EIA crude oil inventories and the weekly petroleum reportEventsWhat the weekly petroleum report contains, why Cushing matters, and the limits of one weekly reading.
- Earnings season and the reporting calendarEventsWhy results cluster into seasons, how a release differs from a filing, and what a surprise measures.
- Sovereign credit rating reviewsEventsWhat a sovereign rating is and is not, and why outlook and watch carry information the grade does not.
- Oil as the regional macro driverStructureThe chain from a barrel price to Gulf bank liquidity and equities, and why the currency never shows it.
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