What moves the market?
Global Financial Markets are affected by a multitude of factors from the more regular interest rate movements, economic data releases, earnings reports to the more unpredictable political change, international conflict and natural disasters. Although we can't predict natural disasters or political upswings, we can certainly give you a heads up on what's going on in the world of finance to help you with your trading decisions.
Check out our events calendar for an outlook on global economic releases and relevant upcoming earnings announcements. We also have a corporate actions calendar which provides details of upcoming rights issues, stock splits and other corporate actions. In order to interpret these you need to know what they mean - check out our detailed glossary here.
Central Banks & Interest Rate Decisions
Traditionally, meetings of central banks and interest rate decisions would have had a large impact on world and local markets. In recent years however, the importance of the decision taken at the meeting has reduced since economic policy is much more transparent and any changes are usually well flagged before the meeting. As a result, it is the communiqué which accompanies the decision that has the major impact as analysts and traders rush to interpret any changes in sentiment. However, it is still not overly unusual for some of the less important central banks, or indeed those who are less transparent (BoE, BoJ), to shock the market with unexpected decisions.
European Central Bank (ECB): www.ecb.int
Set up in 1998, the ECB is the central bank for Europe's single currency, the euro. The ECB's main task is to maintain the Euro's purchasing power and thus price stability in the euro area. The euro area comprises the 13 European Union countries that have introduced the euro since 1999. Currently headed up by President Jean Claude Trichet, the bank meets 26 times annually, twice a month. The first meeting each month decided on monetary policy. The majority of the meetings are held at the banks headquarters in Frankfurt but meets in one of the other member states on two occasions during the year. The aim of the bank is to maintain price stability, or keep inflation low. Currently the target inflation rate for the eurozone is to keep it below 2%.
US Federal Reserve (Fed): www.federalreserve.gov
The Federal Reserve is the banking system of the United States. The Federal Open Market Committee, or FOMC, is the Fed's monetary policy committee, currently headed up by Ben Bernanke and formerly by Dr. Alan Greenspan. It meets eight times a year in Washington (the schedule is on the Fed's website) to set the Fed funds rate. Announcements of changes in monetary policy are at about 2:15 p.m. Eastern Time (7:15pm Irish time) (on the second day if it's a two-day meeting), and the minutes of the meetings are released within a few days of having been approved by the committee at its subsequent meeting.
Bank of England (BoE): www.bankofengland.co.uk
The Bank of England is the central bank of the UK and is responsible for monetary policy. The governor of the BoE is Mervyn King, who took over office in 2003. The main object of the bank is maintaining price stability and supporting the monetary policy of the British government. The Monetary Policy Committee (MPC) has the responsibility of setting the official interest rate.
Bank of Japan (BoJ): www.boj.or.jp
The Bank of Japan operates similarly to western economies, meeting once a month for two days to discuss the economic situation. The meeting concludes with a decision on interest rates and a press conference. Due to the time difference, the immediate impact is often lost on western market participants and they usually don't find out until headline reading at breakfast time.
Economic Releases
Some of the most important of these are listed below.