- Balance of trade
- Beige Book
- Bridge/Commodity Research Bureau (CRB) Indices
- BTM-UBSW Chain-Store Sales Index
- Building permits
- Business inventories
Balance of Trade (Merchandise Trade Balance)
The indicator that shows the difference between imports of goods and a nation’s exports is called the Trade Balance. On the other side, it may also be considered the difference between national investment and national savings. When export exceeds import, a positive Trade Balance, or a surplus, occurs. A deficit, or a negative trade balance, occurs when import exceeds export. The Trade Balance is a major indicator of foreign exchange trends, therefore the foreign exchange markets closely follow and any changes in exports and imports.
Rates of imports and exports are significant indicators of the overall activity in the economy. Changes in export activities represent the competitive position of the country in question, as well as the intensity of economic activity abroad. Strength of domestic economic activity is reflected by developments in the import activity. When a country has weak currency, it is the result of large Trade Balance deficit, as there is a continually commercial selling of the currency of this country. However, substantial financial long-term investment flows can solve the problem. A surplus occurs when the exports exceed the imports, otherwise a deficit, appears, as the current situation for the US. Different factors can be useful in reaching the balance, such as exchange rates, prices of domestic goods, tariffs, trade agreements or barriers.
Trade surpluses may lead to harmful protectionist policies, although they are generally good for the economy. Deficits can cause problems with debt servicing and unemployment. The US has had a trade deficit is continuously growing (from $101.7 billion in 1990 to $716.7 billion in 2005). Among the reasons we can name the growth of the US economy, high rising oil prices, globalization, demand for American investment assets and the dollar’s use as a reserve currency and its overall strength. One of the possible results of this imbalance is depreciating the dollar.
Ideally it can cause imports decreasing, because of reducing of consumers’ purchasing power. Generally speaking, a deficit may lead traders to short the dollar and it’s believed to be a sign of US economic weakness. Trade balance is followed by an average move of 64 pips in the price of the EUR/USDand is usually published near the middle of the second month after the reporting period. Beige Book Each Federal Reserve Bank collects remarkable information on current economic condition in its District through different sources, such as reports from Bank and Branch directors and interviews with key businessmen, market experts and economists. This information is summarized by District and sector in Beige Book.
Fed, uses this report along with other indicators, to define interest rate policy at FOMC meetings, which are held two weeks after the Beige Book’s publishing. Interest rates may be changed depending on trends portrayed in the Beige Book. Federal Reserve Board releases the Book eight times a year, every six to eight weeks at 2:00 p.m., second Wednesday before Federal Open Market Committee Meetings.
Bridge/Commodity Research Bureau (CRB) Indices CRB is everyday indices for 23 different commodity price measures. It is considered as valuable indicator of increase in consumer prices and inflation. BTM-UBSW Chain-Store Sales Index BTM-UBSW Chain-Store Sales Index is based on private review information and it covers the week ending the previous Saturday. This index is seasonally adjusted. This index is necessary because its month-to-month changes are a coincidental indicator of nominal retail department store sales. Building Permits This application is updated every month. It represents construction statistics on new privately owned residential housing units authorized by building permits by place and by county. Data items contain number of buildings, units, and construction cost for monthly new privately owned residential Building Permits.
Business Inventories This report is released monthly by the Commerce Department and contains inventory statistics and sales from all three stages of the manufacturing process, which are manufacturing, wholesale, and retail. But two of its inventory components and all three of its sales components have already been reported by the time it is released. As a rule, the market pays no attention to the business inventories report because retail inventory is the only new piece of information in it.
