Manufacturing Report Announcement – Forex Calendar

Manufacturing Report Announcement – Forex Calendar

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Manufacturing announcements report on how much manufacturing activity is taking place within an economy. Manufacturing is one of the most significant drivers of economic growth and job creation in most economies, so seeing increasing levels of manufacturing activ­ity is always a good sign. Conversely, seeing decreasing levels of manufacturing activity is typically a negative sign for an economy.

Manufacturing data are released in multiple announcements that you need to be aware of:

  1. Factory orders: Measurement of factory demand and activity
  2. Industrial production and capacity utilization: Measurement of the goods produced in an economy and the spare production capacity of its manufacturers

Impact on Trade Flows

Increasing Manufacturing –> More Jobs –>Increased Consumer Spending –> Increased Demand for Imports —> Increase in Trade Flows

Increasing Manufacturing –> Increased Demand for Raw Goods and Materials–> Increased Demand for Imports –> Increase in Trade Flows

Decreasing Manufacturing –> Fewer Jobs –> Decreased Consumer Spending –> Decreased Demand for Imports –> Decrease in Trade Flows

Decreasing Manufacturing–>Decreased Demand for Raw Goods and Materials —>Decreased Demand for Imports —>Decrease in Trade Flows

Impact on Investment Flows

Increasing Manufacturing —> More Jobs —> Increased Consumer Spending—> Increase in Corporate Profits—>Rising, More Attractive Stock Market —> Increase in Investment Flows

Increasing Manufacturing—> More Jobs —> Increased Consumer Spending—> Rising Inflation —> Central Bank Raising Interest Rates—> More Attractive Government Debt Market —> Increase in Investment Flows

Decreasing Manufacturing—> Fewer Jobs -> Decreased Consumer Spending -> Decline in Corporate Profits -> Falling, Less Attractive Stock Market -> Decrease in Investment Flows

Decreasing Manufacturing —> Fewer Jobs —> Decreased Consumer Spending –> Falling Inflation -> Central Bank Lowering Interest Rates—> Less Attractive Government Debt Market —> Decrease in Investment Flows

Impact on Money Supply

Increasing Manufacturing—> More Jobs —> Increased Consumer Spending —> Rising Inflation –> Central Bank Raising Interest Rates —> Decrease in the Money Supply

Decreasing Manufacturing—> Fewer Jobs —> Decreased Consumer Spending –> Falling Inflation —> Central Bank Lowering Interest Rates —> Increase in the Money Supply

Impact on Investor Fear

Increasing Manufacturing —> Confident Investors

Decreasing Manufacturing —> Nervous Investors

Typical Impact on the Currency

Increasing Manufacturing—> Stronger Currency

Decreasing Manufacturing —> Weaker Currency

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