Part V. What Could Shape the Market? Commander in Pips: So, we’ve discussed monetary policy, impact of interest rates on the market and the role of a Central Bank and its representatives. Today we will discuss major fundamental data that could shape the market in th long-term perspective. Business sentiment and economy perspective Big attention is attracted by this data. Depending on what sentiment has consumers and companies – they act differently. If the economic outlook is positive and the economy shows stable solid growth (for mature economies – 3-5% per year), then consumers feel confident and safe with their future and spend more money. Companies receive stronger growth in revenues and make more money, since they can invest more in growth of their business and, as a result, also spend more money. When everybody spends money it makes a positive impact on the economy. When perspectives for the economy become weaker, or when it already has fallen into contraction, then consumers do not spend and save more. Companies earn less and do not increase production, since consumers do not buy more. This means that overall spending declines. That’s why it is important to catch news and opinions from well-known analysts and financial authorities (the most important of them is the Central Bank) about economic outlook. Flows of Capital With the fast development of technologies, internet and globalization currently almost any person could move money anywhere as fast as blink of an eye. Double click and you may buy futures on the Nikkei, sell bonds and speculate on exotic currencies or options simultaneously. Another click and you may withdraw your money that you’ve earned today on Japan stocks just 2 hours later. Since currently it’s very simple and fast to move capital to any location all over the globe, we have to keep an eye on where the “Big Whales” move their money.