One key aspect of investing is planning your trades and sticking with your plans. The CFD market is poised for an eventful year in 2024, with dozens of events and news planned across the calendar months. Knowing these events before the news arms you with information to plan and execute trades as you prefer. Whether you are just starting to invest or have experience with various investments, this article will help you determine your course of action when trading CFDs in 2024.
Exploring CFDs
CFD trading is heavily influenced by market forces controlled by critical economic and political events. CFDs on currencies, metals, commodities, stocks, and options are widely traded; the CFD market is worth billions. Planning your CFD trading schedule helps you determine your risk appetite, streamline your actions to match your goals, and improve your trading outcomes.
Many events impact various markets; there are indirect impacts where one market may affect the other. For instance, changes in the stock market may quickly influence the sentiment in the forex market. Thus, keeping track of important events will give you more information when trading CFDs.
Key Events to Consider for Your CFD Trading Week
July
Federal Reserve (FOMC) rate decision: The Federal Open Market Committee (FOMC) determines monetary policies and typically makes exchange rate decisions at meetings. The July meeting is scheduled for 3 July, 2024. Periods of volatility usually come after the announcement, with traders holding different positions in expectation.
Get a market pulse before the announcement and follow the news to get a scope of the expected announcements. Higher interest rates typically cause a surge in the value of the USD and certain assets but plummet others. Follow expert analyses to determine the news impact, or wait until the market adjusts before trading.
European Central Bank (ECB) press conference: The ECB is set to have one of its meetings on 18 July 2024, after which interest rate decisions will be announced. These impact the value of the EURO and Eurozone economy at large. The ECB is mulling rate cuts but may take some time to reach that decision.
Keep an eye on the interest rates for May and June and the quarterly reports on the Eurozone and ECB performances.
Unemployment Claims: July’s unemployment claims report is for 25 July 2024. This provides a clear outlook on economic health; an increase in unemployment claims indicates a struggling economy with higher unemployment rates and could trigger a short-term bearish market for the USD and certain assets.
Watch out for other news around this period, especially inflation and interest rates, and keep track of the Fear and Greed index.
August
BOE Monetary Policy Report: The Bank of England is expected to release its report on 1 August 2024 and should also announce the monetary rates. The interest rate expectations and announcements impact the GBP’s exchange rate and may influence GBP pairs. Investors expect the BoE to cut rates starting May 2024. Reuters reports that investors are already taking positions based on that information.
If you trade around July/August, ensure you manage the volatility that typically accompanies rate announcements; a rate cut may see a bearish move on the GBP, but the US Federal Reserve and European Central Bank announcements may also impact the market at that period.
Core PCE Price Index m/m: The US Core PCE Index tracks underlying inflation trends and is an important economic indicator. The Core PCE Price Index m/m data is set for release on 30 August 2024. A higher PCE reading is generally bullish for the USD, while a lower reading is typically bearish.
It is important to note that other market factors may influence the market simultaneously, so practice risk management to manage your trades properly.
Manufacturing PMI: 30 August 2024 will also see the release of the Manufacturing PMI data. Manufacturing PMI measures the health of the manufacturing industry and is a crucial indicator of economic strength. A PMI reading over 50% represents growth in the manufacturing industry and may induce bullish sentiments on the USD.
Other events to watch out for include ADP Non-Farm Employment Change (4 September 2024), Empire State Manufacturing Index (16 September 2024), RBA Rate Statement (24 September 2024), UK retail sales data (18 October 2024), BOC Rate Statement (23 October 2024), Flash Manufacturing PMI (24 October 2024), Non-Farm Employment Changes (1 November 2024), and Inflation Expectations q/q (6 November 2024).
In December, Prelim UoM Consumer Sentiment (6 December 2024) and Industrial Production y/y: (13 December 2024).
Most significant Events in 2024
It is an election year in the US, and the elections will shape up 2025 and beyond. The Congressional and Presidential Elections are slated for 5 November 2024, while the Parliamentary Elections will be held on 11 December 2024.
The Elections will impact investors’ sentiment on the USD and other markets in the economy. Key economic points for the winners will reflect on the market, causing a bullish or bearish market for CFD traders. With party primaries starting in January, traders must watch for sentiment change in the coming months.
Use Economic Calendars To Prepare for News Volatility
You can easily use the economic calendar provided by your broker or trading platform, mark important dates on your economic calendar, and track critical events impacting the market. Trading CFDs before or after news releases may see high volatility, so ensure you analyze markets before taking positions.
