Monetary Indicators

Monetary Indicators - Definition

Monetary indicators provide insight into the health of the market based on economic data. This data helps gauge how businesses will be affected by the economic environment, thus providing investors an edge when selecting the company they chose to invest in. A good example of a monetary indicator is interest rates. When the interest rates are lowered, the market generally responds positively to this information, which leads to bounces in businesses that rely heavily on lending rates, such as the banks and homebuilders. Traders that focus on monetary indicators when making investment decisions are more suited for long-term investment strategies. Examples of monetary indicators include: consumer debt, Treasury Bill rates, interest rates, inflation, money supply and corporate debt.