Key economic reports

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Regularly scheduled economic indicators including inflation, manufacturing starts and gross domestic product reports are released by U.S. government agencies and have the potential to act as catalysts for market movement.

Key U.S. Economic Indicators In Alphabetical Order

Products Based Directly On Reports

The contracts, based on the monthly BLS Establishment Survey of 375,000 businesses that is usually released on the first Friday of each month, allow customers to directly manage their exposure to the government labor number or to offset positions in financial markets. The Nonfarm Payroll report is typically the first major economic release of each month and speaks to the condition of employment from the prior month. It is closely followed as a way to gauge how the Federal Open Market Committee (FOMC) perceives economic growth.[1]

  • On Jan. 8, 2004, CME Group launched futures contracts on the U.S. Consumer Price Index (CPI).

According to the CME, the launch in 1997 of Inflation-Indexed Treasury Notes (TIPS) created a viable U.S. dollar-denominated asset class for those who wanted the surety of fixed-income returns with a built-in hedge against a rise in inflation.

At the end of the third quarter of 2003, over $160 billion in TIPS were outstanding, which accounted for nearly 5 percent of all marketable Treasury debt. The exchange said anecdotal evidence suggested that TIPS securities, as an asset class, tended to be broadly distributed across a large number of investors. As this alternative asset base grew, investors began to look outside the TIPS market to manage their inflation risk.

There was also an expanding over-the-counter dollar-denominated inflation-indexed derivative market, the exchange argued, and demand for a standardized exchange-traded product from dealers to complement these customized risk-management tools. An OTC inflation derivative market with approximately €8 billion in notional value outstanding had already been established in Europe.

The CPI futures contract was designed to resemble the CME's Eurodollar futures contract. It represents the inflation on a notional value of a $1 million for a period of three calendar months, implied by the Consumer Price Index – U.S. city average for all urban consumers, all items, not seasonally adjusted (CPI-U) published by the Bureau of Labor Statistics of the Department of Labor.[2]

Data Resources

See also *European financial releases

References

  1. Press Release. CME Group.
  2. Press Release. CME Group.