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Gross Domestic Product (GDP)

Importance: Enormous *****

Influence: Forex, Equity Markets, Commodity Markets, Bonds Market

US GDP Release: US Advance GDP released 1 month after the end of the quarter by the Bureau of Economic Analysis (BEA). Final GDP released 3 months after the quarter’s end. GDP releases during the last week of each month.

Europe’s GDP Release: Monthly updates

 

What is GDP

The Gross Domestic Product or GDP is a key economic indicator that measures any country's economic growth. GDP represents the total dollar value of all goods and services produced over a specific time period in an economy or an economic zone. GDP is also expressed as a comparison to the previous quarter or each year.

Calculating GDP -2 Methods

 

Measuring GDP is very complicated and it can be done either by adding up what everyone earned in a single year (GDP income approach) or by adding up what everyone spent in a single year (GDP expenditure approach).

 

Eurostat Yearly GDP Calendar

Eurostat, yearly Calendar as follows:

-January, 10th –3rd Estimate Q3 of the previous year

-February, 14th –1st estimate Q4 of the previous year

-March, 5th –2nd estimate Q4 of previous year

-April, 2nd –3rd Estimate Q4 of the previous year

-May, 15th –1st estimate Q1 of the current year

-June, 4th –2nd estimate Q1 of the current year

-July, 2nd –3rd Estimate Q1 of the current year

-August, 14th –1st estimate Q2 of the current year

-September, 5th –2nd estimate Q2 of the current year

-November, 14th –1st estimate Q3 of the current year

-December, 5th –2nd estimate Q3 of the current year

GDP means Gross domestic product and it is a measure of a country’s economic activity and economic growth.

 

The Effect of GDP in the Forex Market

◙ When the GDP of an economy increase (↑) that means that the demand for the underlying currency increases and therefore it appreciates (↑) against all other currencies.

◙ When the GDP of an economy decrease (↓) that means that the demand for the underlying currency decreases and therefore it depreciates (↓) against all other currencies.

 

The Effect of GDP in the Equity Markets (stocks & indices)

◙ When the GDP increases (↑) the stock market is rising (↑)

◙ When the GDP decreases (↓) the stock market is falling (↓)

 

The Effect of GDP in the Commodity Markets

◙ When the GDP of an important country increase (↑) the commodity prices are rising (↑)

◙ When the GDP of an important country decreases (↓) the commodity prices falling (↓)

World GDP Growth (%) by IMF

Related Links:US Bureau of Economic Analysis (BEA) | ► Eurostat

 

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What is the Gross Domestic Product (GDP)?

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