High impact news
Family IX · Macro
Not to be confused with news trading, sell the news.
High impact news is a classification of scheduled events that market participants expect to move prices sharply across several markets at once. The label is applied by calendars and data providers based on historical volatility around the release, not on the direction of the move. Because the same event can be high impact in one regime and muted in another, the classification is a guide to attention, not a guarantee of movement.
What makes an event high impact
Impact ratings are assigned by comparing the typical size of price changes in a short window around a release with the size of changes in ordinary periods. Events that clear that bar in several asset classes are usually those that change expectations for interest rates, inflation, or growth.
- Central bank decisions and accompanying statements or press conferences.
- Inflation data such as consumer or producer price indices.
- Labour market data such as non-farm payrolls or unemployment rates.
- Growth data such as GDP releases.
- Geopolitical events that are unscheduled and therefore not listed on calendars.
Calendars typically tag these with a colour or a number of bars, but the exact scale and the set of events covered differ between providers.
Worked example: spread and slippage around a release
A trader holds a position in an instrument where the normal bid-ask spread is 1.0 point. Two minutes before a high impact release, the spread widens as liquidity providers pull quotes.
The figures are illustrative; actual widening depends on the instrument, the venue, and the specific release.
How the label is used
Traders use the high impact label to plan around known volatility windows. Common responses include reducing position size, widening stop distances, avoiding new entries immediately before and after the release, or standing aside entirely. The label does not indicate direction, and a high impact event can produce a move that reverses within minutes.
Because unscheduled events are not on calendars, the label covers only the scheduled portion of market-moving news.
Often confused with
- news trading
- News trading is a strategy of taking positions based on news releases, whereas high impact news is the classification of the events themselves; the visible sign is that news trading describes an action, while high impact news describes a calendar tag.
- sell the news
- Sell-the-news describes a specific price pattern in which an asset falls after positive news, whereas high impact news only identifies that an event is likely to move prices; the visible sign is that sell-the-news names a directional outcome, while high impact news names the event.