Financial markets aren’t abstract objects disconnected from their surroundings. They are interconnected with the rest of the world, influence decisions, and are influenced by unforeseen events — the COVID-19 pandemic, for example, had lasting effects on the economy. The economic calendar helps keep up with the latest world news. Getting ahead of these influencing factors, and adapting investment strategies accordingly, is a way of making the most out of the market.
Various Types of Economic Events and Their Influence on Trading Decisions
Economic calendars gather economic publications, like GDP reports, employment data, or inflation rates. This information can be used to predict how the market will behave. For example, the recent rate cut announced by the Federal Reserve caused stock indexes to drop from 2.5% (Dow Jones) to 3.56% (Nasdaq). Similarly, high inflation rates tend to lower the risk investors are willing to take or cause the rise of store-of-value assets, like gold. Monitoring these reports can help traders adjust their strategies.
Economic Indicators
It was already mentioned that inflation, one of the main economic indicators, impacts stocks and commodities. Other metrics, like Real GDP, can also tell investors how the market will behave. Real GDP accounts for goods and services produced in a country, adjusted for price changes. A high GDP means the economy is thriving, money is flowing, and people are spending. A low GDP leads to financial uncertainty.
Interest Rate Decisions by Central Banks
Interest rates are set by central banks and financial institutions, like the Federal Reserve in the US. We have recently seen how the markets react to this. After the Fed announced a third rate cut, the price of stocks dropped. Paired with high inflation, rate cuts mean investors should lower their risks. But rate cuts during a low inflationary period can actually mean the opposite. It invites traders and companies to borrow loans, make big investments, and spend more.
Consumer Price Index and Inflation Rates
Inflation gets mentioned a lot, but what does it mean exactly? In short, inflation measures the purchasing power of money related to specific products and services. The Consumer Price Index (CPI) tracks the monthly cost of a basic set of needs, from food to medical care. This can be used to track the strength of the coin, as a high inflation rate means the coin is weaker and isn’t as valuable.
Gross Domestic Product Growth Rates
GDP measures the production of the country. When accounted for inflation, it can either show a stable, decreasing, or growing value. When real GDP is increasing, it means companies are producing more, customers are consuming more, and the economy is healthy overall. This encourages more local and international investments, and a part of that value flows into stocks and commodities as well.
Trade Balances and Export-Import Data
Trade data is also published by financial authorities. It can inform investors about the country’s economic state. It also indicates market dynamics for commodities and can be leveraged to adapt trading strategies. In general, all these metrics form the economic landscape and must be analyzed as a whole.
Labor Market Trends
Labor market data is very explicit about a certain country’s economy. In the US, the Bureau of Labor Statistics releases monthly reports on employment and unemployment. High employment rates indicate the economy is doing well, and the market is suited for larger investments.
4 Decisive Economic Events in 2025
If you want to make the most out of your investments in the coming year, there are some events and reports you should keep your eye on.
1. G20 Summit and Global Economic Discussions
The G20 Summit is a forum gathering representatives of the world’s largest economies. The latest meeting took place in Brazil in November 2024. Conversations focused on pressing issues in today’s world, like energy transition or global governance. The summit is influential, first, because its members represent over 80% of the global GDP. Second, discussions about energy transition, for example, can impact the price of oil and other similar commodities.
2. Quarterly GDP Reports
Quarterly GDP reports can be tracked in economic calendars as well. Investors should follow GDP reports on their own country. But reports on major economies around the world are influential, too. Checking reports on major producers, like China or Brazil, indicates how certain assets will behave. It’s also worth thinking about how investors will react to news. Predicting market outcomes gives a little advantage, if traders can make their movements ahead.
3. Federal Reserve Meetings
The Federal Reserve manages the economy of the US. Their job is to keep inflation in the expected margin and oversee production across industries. During its latest announcement, the Fed indicated that there will only be two rate cuts during 2025, reducing interest by 0.50% in the coming year.
4. OPEC+ Meetings and Oil Production Decisions
The OPEC+ is an alliance of oil-producing countries. Since its creation, OPEC has played a big role in global markets, as they can decide to raise or lower oil prices. It has been used as a political tool in the past, and social or political turmoil can shape the decisions of OPEC+ members. Be aware of the next meetings and announcements, and don’t miss any related news. It can indicate market movements in oil, and it’s influenced by the rise of renewable energies as well.
Align Your Payment Strategies with Economic Trends Today!
Trading is not a passive activity. Traders have to keep an eye on economic trends domestically and internationally. Social and political movements influence market dynamics, so keep updated and adjust your trading strategies accordingly. There’s always a chance to make a profit; it all depends on how your portfolio adapts to an ever-changing context.
