T2W Trading Community

Implicit Deflator
Definition: The implicit deflator is calculated by dividing the current dollar GDP figure by the constant dollar GDP figure. GDP implicit deflator is released quarterly with the respective GDP figure.

Index of Leading Economic Indicators
Definition: The Index of Leading Indicators consist of the following economic indicators

• Average workweek of production workers in manufacturing.
• Average weekly claims for state unemployment.
• New orders for consumer goods and materials
• Vendor performance (companies receiving slower deliveries from suppliers)
• Contracts and orders for plant and equipment
• New building permits issued
• Change in manufacturers’ unfilled orders, durable goods
• Change in sensitive materials prices
• Index of stock prices
• Money supply
• Index of consumer expectations

This index is designed to offer a 6 to 9 month future outlook of economic performance.

Industrial Production
Definition: Industrial production consists of the total output of a nation’s plants, utilities, and mines. From a fundamental point of view, it is an important economic indicator that reflects the strength of the economy, and by extrapolation, the strength of a specific currency.

Institute for Supply Management (ISM) Index
Definition: The Institute for Supply Management (ISM) Index is a composite diffusion index of national manufacturing conditions. Readings above 50 percent indicate an expanding factory sector. The index is calculated from five of the eight sub-components of a monthly survey of purchasing managers at roughly 400 manufacturing firms representing 20 industries and all 50 states. The survey queries purchasing managers about the general direction of production, orders, inventories, employment, vendor deliveries and prices.

ISM Index: Manufacturing
Definition: A national manufacturing index based on a survey of purchasing executives at roughly 300 industrial companies. Signals expansion when the PMI is above 50 and contraction when below.

ISM Services Index
Definition: Also known as Non-Manufacturing ISM. This index is based on a survey of about 370 purchasing executives in industries of finance, insurance, real estate, communications, and utilities. It reports business activity in the service sector.

Jobless Claims
Definition: New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility.

Machine orders (Japan)
Definition: Machine Orders Data (also known as Machine Tool Order Data) is a figure issued by Japan Machine Tool Builders Association (JMTBA) every month. It serves as one indicator of the Japanese economy. In the forex market, the release of such data is often followed by sharp change in currency exchange rate.

Monetary Base (Japan)
Definition: The monetary base is the "Currency Supplied by the Bank of Japan" and is defined as follows. Monetary base = Banknotes in Circulation + Coins in Circulation + Current Account Balances (Current Account Deposits in the Bank of Japan)

Monetary Policy
Definition: An attempt to influence the economy by operating on such monetary variables as the quantity of money and the rate of interest. The nation’s central bank is usually involved with monetary policy.

Money Supply
Definition: The money supply is basically defined as the quantity of money (money stock) held by money holders (general corporations, individuals and local governments).

M1
Definition: A category of the money supply that includes all coins, currency and demand deposits (that is, checking accounts and NOW accounts).

M2
Definition: A category of the money supply that includes M1 in addition to all time deposits, savings deposits and non-institutional money-market funds.

M3
Definition: A category of the money supply that includes M2 in addition to all large time deposits, institutional money-market funds, short-term repurchase agreements and certain other large liquid assets.