Nowcasting commodity market using real time data stream

Andrius Guzavicius

Abstract


Purpose. Because of the complexity financial instruments  and difficult economical situation today instead of forecasting it is useful to have real-time and reliable data, that might  identify current stage in commodity market with holistic approach.   There are different scientific opinions, that some financial indicators have power to predict market action providing readers with understanding of nowcasting approach regarding regional heterogeneity in commodity markets.

Methodology. Different nowcasting models  using heterogeneous set of predictors, including diferent statistics, as also surveys.  The data are monitored by market participants to identify the state of the curent market.

Results. Techniques of nowcasting have been based on simplified heuristic approaches and can be formalized in a different statistical models. Models collecting information from a large quantity of data series at different frequencies and with different time lags. Signals about the direction of change in main economic indicators can be extracted from heterogeneous set of information sources, data are used to compute the real time flow of data. The commodity market  representing sector, that plays a main role in facilitating economic activities between sectors and across regions, and can be useful in monitoring and identifying cyclical turning points the current state of the economy, however, regional heterogeneity and different approaches regarding liquidity in financial markets and data availability are necessary.

The theoretical contribution. Methodology of nowcasting commodity market by using real time data stream might be designed to include essential characteristics of the holistic economic approach in financial markets.

Practical implications (if applicable). The results of research is to provide readers with understanding of nowcasting approach regarding regional heterogeneity in commodity market. The results might be tested in JSC Lithuanian Railways

Keywords: Nowcasting, commodity market, real time data stream

Paper type: Theoretical paper.


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