Trading Around Economic Releases: CPI, Jobs, FOMC and What Moves Futures

Most of what moves futures intraday is unscheduled: order flow, positioning, a headline nobody saw coming. A handful of the biggest moves of the month, though, arrive at times printed on a government calendar weeks in advance. You know the day, the hour and the minute. You don't know the number.

That combination, a known time and an unknown outcome, makes economic releases unusual. They are the one kind of volatility you can plan for in detail. This article covers which releases matter most for futures traders, exactly when they come out, what in them tends to move markets, and how to build a plan for the week and for each release.

What happens to your fills in the seconds around a release (thinning books, wider slippage, stops swept on both sides) is its own topic, covered in economic releases and execution quality. Here the focus is on the calendar and the plan.

The Three That Matter Most

Plenty of data comes out every week, but three scheduled events stand above the rest for US futures: the Consumer Price Index, the Employment Situation report, and the Federal Open Market Committee's policy decisions. All three speak directly to what the Federal Reserve is likely to do with interest rates, and interest-rate expectations feed into equity index, Treasury, currency and metals futures alike.

Consumer Price Index (CPI)

Who publishes it: the US Bureau of Labor Statistics (BLS).

When: at 8:30 a.m. Eastern time, monthly, on a date set in the BLS release calendar. Each release covers the previous month: the CPI that comes out in October reports on September.

What's in it: the headline figure is the index for all items. The figure many market participants watch most closely is all items less food and energy, usually called core CPI, because food and energy prices swing for reasons that monetary policy can't do much about. BLS reports the monthly change on a seasonally adjusted basis, alongside the change over the past twelve months.

Why it moves futures: inflation is the Fed's central concern. A hotter-than-expected print raises the odds of tighter policy for longer; a cooler print lowers them. In periods when the Fed has said its next move depends on the inflation data, CPI can be the biggest scheduled event of the month.

The Employment Situation (the jobs report)

Who publishes it: BLS.

When: at 8:30 a.m. Eastern time, monthly. On the BLS schedule it is usually a Friday, early in the month, and it covers the previous month.

What's in it: the report combines two surveys. The establishment survey (businesses) produces nonfarm payroll employment, the headline jobs number, along with hours and average hourly earnings. The household survey produces the unemployment rate. Each release also revises payroll figures for the two prior months as more reports come in.

Why it moves futures: it speaks to both halves of the Fed's mandate at once: employment directly, and inflation through wage growth. Traders often look past the headline to earnings and to the revisions; a strong headline paired with large downward revisions to earlier months can read as weaker than it looks.

FOMC decisions

Who: the Federal Open Market Committee of the Federal Reserve, which sets the target range for the federal funds rate.

When: the FOMC holds eight regularly scheduled meetings a year, each over two days, with other meetings as needed. The policy statement is released at 2:00 p.m. Eastern on the second day, and the Chair's press conference starts at 2:30 p.m. Eastern. The minutes of each scheduled meeting are released three weeks after the policy decision. Four of the eight meetings each year come with a Summary of Economic Projections, the participants' projections for the economy and for policy.

Why it moves futures: the decision itself is often widely expected by the time it's announced. What moves markets is usually the wording of the statement, any change in how the Committee describes the outlook, the projections at the meetings that have them, and what the Chair says, and doesn't say, at the press conference. That's why FOMC days often have two distinct moves: one at 2:00 and another during the press conference.

Other Releases Worth Marking

Below the big three sits a second tier that can move markets, especially when it surprises or when the big releases have made a particular topic sensitive. These include the Producer Price Index, retail sales, GDP, the ISM manufacturing and services surveys, and weekly jobless claims. Check the publisher's own calendar for each one's day and time rather than relying on memory.

If you trade crude oil, add one more: the US Energy Information Administration's Weekly Petroleum Status Report, released on Wednesdays at 10:30 a.m. Eastern. In holiday weeks the EIA moves it, usually to Thursday, so check its release schedule rather than assuming.

Time Zones and the Futures Session

All of the times above are Eastern. If you trade from Chicago, CPI and the jobs report land at 7:30 a.m. Central and the FOMC statement at 1:00 p.m. Central. Traders in Europe or Asia need to account for the different dates on which daylight saving time changes in different countries, which can shift a release by an hour relative to your local clock for a few weeks each year.

Note where the 8:30 a.m. releases sit in the trading day. Equity index futures trade nearly around the clock, and the 8:30 releases arrive an hour before the US cash equity open at 9:30. That means the biggest data of the month often hits a thinner pre-open market, and the reaction is already priced into futures by the time cash stocks start trading. Traders who only watch from 9:30 are trading the second chapter of a story that started an hour earlier.

What Actually Moves the Market: The Surprise

A common mistake is to think of releases as "good" or "bad" numbers. Markets react to the difference between the number and what was expected, not to the number itself. A strong jobs number that was widely forecast can produce almost no move. A modestly weaker one, when the market expected strength, can produce a large one.

Several things shape how a surprise lands:

• The components. Core CPI against headline; average hourly earnings against payrolls; revisions against the latest month.
• The context. A CPI print matters more when the Fed has tied its next step to inflation data, and less when policy is settled.
• The other data. A release that confirms the trend of recent data tends to have a smaller effect than one that breaks it.

You don't need to forecast any of this to trade around releases well. But it explains why you can't predict the size of the move from the importance of the release alone, and why two CPI mornings can look nothing alike.

Planning the Week

A release plan starts on the weekend or the evening before the week begins.

1. List the releases for the week from the publishers' own calendars (BLS, the Federal Reserve, the EIA if you trade energy). Note the day and time of each.
2. Mark which ones matter for what you trade. CPI, jobs and FOMC matter for nearly everything. EIA's weekly report matters for crude and much less for equity index futures.
3. Mark the windows you don't intend to trade. A common choice is a few minutes before to several minutes after each of the big three.
4. Check your account's rules. Some prop firms restrict trading around certain scheduled releases. Know whether yours does, and what counts as a breach.
5. Plan positions that might span a release. Swing positions, or intraday positions that could still be open at 2:00 p.m. on FOMC day.

Planning Each Release

For each release you mark, decide three things in advance: what you'll do before, at, and after.

Before: flat, reduced or deliberate

Decide whether you'll be flat into the number, hold reduced size, or hold deliberately. "I'll see how I feel at 8:25" is not a decision. The thinning of the order book in the minutes before a major release (see the execution article) means exits get more expensive the closer you get to the print, so decide early.

If you'll hold through, the stop distance that works in a calm market is usually too tight. Either widen it to sit outside the plausible move and cut size so the dollar risk stays the same, or decide to exit on time instead of on price.

At: stand aside

For most discretionary day traders, the first seconds after a major print are not a place to be entering. The price is moving faster than anyone can read the number, and the first move frequently reverses. If you trade the reaction, decide in advance how long you'll wait.

After: a re-entry rule

Write a rule for when you'll trade again. Common choices are a fixed time after the release, the spread returning to normal, or a pullback after the initial move. The point is that the decision is made before the release, when the outcome doesn't tempt you.

Worked Example: A CPI Morning

The numbers below are invented round figures, an illustration of planning rather than any real release.

A trader trades MES and ES during the morning. Their normal plan: 2 ES contracts with a 5-point stop. At $12.50 per quarter-point tick, that's 20 ticks, $250 per contract, $500 per trade. On CPI day they write:

• Before: flat by 8:25 a.m. Eastern. No new entries after 8:20.
• At: no trading 8:25 to 8:40.
• After: first trade no earlier than 8:40, and only at half size (1 ES, or equivalent in micros) until 9:30, because the morning's range is likely to be larger than usual.
• Stop: if the post-release range in the first ten minutes is more than twice the normal size, use a wider stop and cut size further so the dollar risk stays at or below $500.

At 8:40 the market has made a large move and partly reversed. The trader's setup appears at 8:52. With a stop twice the normal distance (10 points), one ES contract risks $500; they take it, no more than their usual risk on twice the distance. The plan didn't predict the direction; it simply kept the trader out of the most expensive minutes and forced the size down while the range was large.

Worked Example: An FOMC Afternoon

Again an illustration with invented numbers. FOMC day has a different shape: the morning is often quiet as the market waits, and the action comes at 2:00 p.m. and again from 2:30 p.m.

A trader writes:

• Morning: normal trading, but no position held past 1:45 p.m. Eastern.
• 1:45 to 2:10: flat, no entries.
• 2:10 to 2:30: optional, half size only.
• 2:25 to 2:45: flat again for the start of the press conference.
• After 2:45: half size until the end of the day.

The trader has accepted they'll miss some moves. In exchange, two of the most volatile windows of the month don't catch them holding a normal-sized position with a normal stop.

Releases on a Prop Account

On a prop account, a release is where a trailing drawdown and a daily limit are most likely to be tested by a single trade. A position that moves several times its normal stop in seconds, with slippage on the exit, can use a large share of a day's budget. On an account with intraday trailing drawdown, a spike in your favor that then reverses has also raised your floor.

If you trade a prop account, the planning above matters more, not less. Check your remaining room the morning of a major release, size for the larger range, and know your firm's rules about trading around releases. Our article on two layers of risk on a prop account covers how your own daily limit sits inside the firm's rules.

Practical Checklist

For each week:

• Read the calendars from the publishers themselves: BLS for CPI and the jobs report, the Federal Reserve for FOMC meetings, the EIA if you trade crude.
• Convert every time to your local clock, and watch for daylight saving changes if you trade from outside the US.
• Mark which releases matter for each contract you trade.
• Check your firm's rules about trading around releases, if you trade a prop account.

For each release:

• Before: decide flat, reduced or deliberate, and by what time.
• Stops: widen and cut size together if you'll hold through, or exit on time instead.
• At: stand aside for the minutes you've chosen; consider a lockout window so the plan holds.
• After: a written re-entry rule and reduced size until the range settles.
• Review: after the close, note how the release went for you and whether the plan held.

The Bottom Line

Economic releases are the rare source of volatility that comes with a timetable. CPI and the jobs report at 8:30 a.m. Eastern, the FOMC statement at 2:00 p.m. and the press conference at 2:30 p.m. on the second day of a meeting: the times are known weeks ahead. What isn't known is the surprise, and that is exactly what makes trading through them expensive and planning around them worthwhile.

You don't need an opinion on the number. You need to know when it's coming, what you'll hold when it does, and what has to happen before you trade again.

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While you're trading, NexTick360's coach counts down to a release that moves what you trade at 15 minutes, again at 5 minutes and when it prints, and a lockout window you set keeps you out of the minutes around it the way you set it. See Intelligence