Economic calendar basics: actual, forecast, previous and impact

An economic calendar is a schedule of upcoming data releases and central-bank events, with the time, the country, an expected value and, after release, the actual number. For a short-term trader it does one job above all: it tells you when the market is about to be hit by news, so you are not caught holding a 1-minute trade at the exact second a major figure prints. Most financial news sites publish a free calendar; the layout is almost always the same.

The columns, one by one

A typical economic calendar row looks like this:

• Time. Check which time zone the calendar uses; most let you set your own. A mix-up of one hour is the classic mistake around daylight-saving changes.
• Currency. The currency most directly affected. A US release mainly moves USD pairs, but big ones ripple through everything.
• Event. The name of the release or meeting.
• Impact. Usually low, medium or high, often shown as one to three icons or colours. This is the calendar provider's judgement of how much the release tends to move prices, not a forecast for today.
• Forecast. The consensus expectation of economists, gathered before the release. This is roughly what the market has already priced in.
• Previous. Last period's figure, sometimes revised. Revisions matter: if last month is revised sharply down, a decent headline can still disappoint.
• Actual. The published figure, filled in at release time.

The number that moves the price is the surprise

Prices react to actual versus forecast, not to whether the number is "good" in absolute terms. In the row above, payrolls came in at 250K against a forecast of 180K, a large positive surprise. A typical first reaction would be a stronger dollar: EUR/USD down, USD/JPY up. If the actual had been 175K, close to forecast, the reaction might be small even though 175K is a healthy figure.

Reactions can also reverse within minutes as traders read the details, such as wage growth or revisions. The first spike is not always the move that lasts.

The big three for currency traders

Non-farm payrolls (NFP)

The US employment report, usually published on the first Friday of the month at 8:30 a.m. New York time, which is 13:30 UTC in northern winter and 12:30 UTC in summer. It includes the change in jobs, the unemployment rate and average hourly earnings. All three can move the dollar, and they sometimes point in different directions. More in the glossary: non-farm payrolls.

Consumer price index (CPI)

The main inflation measure, published monthly in most major economies. Because inflation drives interest-rate expectations, a CPI surprise can move a currency as much as a rate decision. Traders often watch "core" CPI, which excludes volatile food and energy prices.

Central-bank decisions

The US Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan and others announce policy decisions on a pre-published schedule, typically around eight times a year. The rate decision appears at a fixed time, and a press conference often follows, which can produce a second round of movement. Why rates matter so much is covered in what moves currency prices.

Why volatility spikes around releases

Just before a high-impact release, many interbank liquidity providers pull back their quotes or widen their spreads, because nobody wants to be on the wrong side of a surprise. At the release, a burst of orders hits a thinner market. The result is a fast jump, sometimes in both directions within the same minute, followed by a period of elevated volatility.

For a Higher/Lower trade on a market pair, that has a simple consequence. If your trade expires a few seconds after the release, its outcome is decided by the first reaction to a number you could not know in advance. That is not analysis; it is a coin toss with a payout below 100%.

A practical rule

A simple personal rule many short-term traders use:

1. Each morning, check the calendar for high-impact events in the currencies you trade.
2. Do not open short-expiry trades in those currencies in the few minutes before the release, for example the last 10–15 minutes.
3. Make sure no open trade expires during the release window.
4. After the release, wait until the first spike has settled, for example 10–15 minutes, before looking for setups again.

Worked example. It is a winter Friday, and NFP is due at 13:30 UTC. At 13:24 you see a setup on EUR/USD M1 that would call for a 3-minute expiry, ending at 13:27. Strictly, it ends before the release, but the market is already thin and jumpy, and one delayed click pushes it to 13:30. Under the rule above, you skip it and come back after about 13:45.

Write the rule into your trading plan so you do not have to decide it again under pressure. How large each trade should be is a separate question, covered in risk per trade.

What the calendar does not cover

• Unscheduled news. Political statements, conflicts or surprise interventions do not appear on any calendar.
• OTC instruments. On Sky Trade, OTC prices are generated by Sky Trade's server and do not follow any real market. Economic releases have no effect on them; the calendar is relevant only to market pairs.
• Direction. The calendar tells you when risk is concentrated, not which way the price will go.