Fundamental Analysis (Part 2) - Eurozone Figures

Overview
Fundamental analysis considers how global economic news and other events impact financial markets. For example, on a country level, if monetary policies were amended for the benefit of the country’s economy, then it indicates that its currency should gain strength, thus encouraging investors to trade it. Read our second educational article in this series concerned with Eurozone economic figures which are considered in the European fundamentals analysis.
outcome

What economic figures have an effect on the Eurozone?

Reading time
8 minutes
experience level
  • beginner Beginner

Eurozone Figures 


European Central Bank (ECB) Monetary Policy Decision


Like the FED, the ECB conducts eight meetings per year to decide on the Monetary Policy and interest rates. The decision is released at 01:45 p.m. CET (Central European Time) approximately once every five to seven weeks, followed by a press conference for the ECB president 45 minutes after.


As with the FED’s interest rate decision, markets closely watch the guidance from the ECB president on the economic outlook and policy expectations.


European Central Bank Economic Bulletin


This monthly bulletin announces the statistics that policymakers evaluate when setting interest rates. It also gives a detailed analysis from the Bank’s perspective on current and future economic conditions. It is released two weeks after the Monetary Policy Meeting of the European Central Bank Governing Council.


Eurogroup Meetings


This meeting brings together finance ministers of the European Union Countries, representatives of the European Central Bank, and the commissioner for economic and financial affairs, taxation, and customs. These meetings regularly take place on the eve of the Economic and Financial Affairs Council meeting. 


Eurozone ZEW Economic Sentiment


The ZEW Economic Sentiment index measures the economic expectations or outlook for the Eurozone over six months. If the reading is above zero or “positive”, it indicates optimism, but if the reading is below zero or “negative”, it indicates pessimism. This index is a key indicator of economic health, and it considers the opinions of around 350 German institutional investors and analysts. Usually, a reading higher than expected is taken as a positive sign for the Euro, while a reading lower than the expected is taken as a negative sign.


IFO Business Climate Index for Germany 


This index rates the current German business climate and measures expectations for the next six months. This index is compiled based on a survey of manufacturers, builders, wholesalers, and retailers by the IFO Institute for Economic Research. If the reading is higher than expected it gives a positive sign for the Euro. However, if the reading is lower than expected it gives a negative sign for the Euro.


Germany ZEW Economic Sentiment


The ZEW Economic Sentiment index for Germany showcases the six-month economic outlook, in which a positive or above zero level indicates optimism, while a negative or below zero level indicates pessimism. This index is gathered from a survey covering about 350 German institutional investors and analysts. A reading which is higher than expected is taken as a positive sign for the Euro, while a reading lower than the expected is taken as a negative sign.


Germany ZEW Current Conditions


This gives a summary of the net percentage of positive and negative outlooks concerning economic growth for the upcoming six months. This indicator is generated based on a survey conducted for financial analysts from banks, insurance companies, and large industrial firms, and it only considers the markets across Germany, Japan, Britain, France, Italy, the U.S., and other EU countries. A reading higher than expected generally gives a positive sign for the Euro, while the opposite gives a negative sign. 


Germany GfK Consumer Climate


This index measures the consumer level of confidence in economic activity. It is generated using a survey covering around 2,000 consumers rating the relative level of past and future economic conditions. A reading higher than expected is a positive sign for the Euro, while the opposite is considered a negative sign.


ECB Accounts of Monetary Policy Meeting


The ECB publishes the Monetary Policy Meeting Accounts – which contain the details of the meeting – four weeks after the issuance of its interest rate and the Monetary Policy meeting. The publication of these accounts provides information relevant to these decisions, which are of interest to analysts and market participants. The accounts contain a description of the financial, economic, and monetary state in the Eurozone, and the analysis of the previous Monetary Policy measures and their effectiveness, in addition to ideas on the general business climate in the Eurozone and the political environment. 

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