Happy Christmas Eve, traders.
Gold spot-price is putting in new peaks this morning as we start off a weirdly-scheduled holiday week with a Monday half-session. With the Dollar, US Treasury yields, and WTI crude oil all slumping lower along with the stock markets, yellow metal is currently going for over $1266/oz in spot markets while silver tacks towards $14.75/oz. Honestly, I don’t see a lot of momentum behind this latest leg up past $1265, as markets may just be taking their first opportunity to re-position after the weekend news, the partial shutdown of the Federal Government in particular. This is as good a time as any, though, to reiterate that none of this is investment advice.
So, the two big macro stories this week are going to be: the government budget gridlock; and the trajectory of the US (and global) equities market. Our British soap opera will only be in re-runs for the next couple weeks—if there’s one thing they know how to do across the pond it’s take a proper vacation.
Against that backdrop, (and with markets closed early Monday; closed entirely on Tuesday) the economic calendar to end the year is pretty sparse. For those who are interested, here are the highlights:
US Economic Data to Watch
Wednesday, December 26 at 9am EST // Case-Shiller Home Price Index
[consensus expectation: +0.3% // previous: +0.3%]
With this month’s prior housing data mixed so far, some good news and some less-good, the Case-Shiller Index for October is likely to be unchanged although earlier, less scrutinized price indices like CoreLogic’s have shown some solid growth for the month indicating there’s some slight upside risk to the consensus projection. Could prove to be a small life-preserver for US stocks mid-week.
Thursday, December 27 at 8:30am EST // Initial Jobless Claims
[consensus expectation: +217k // previous: +214k]
There’s definitely some potential for an upside surprise on this week’s Claims number to continue the recent trend on this data point, with Goldman Sachs’ team saying, “We see some additional scope for increased jobless claims in energy-producing states.”
Thursday, December 27 at 8:30am EST // New Home Sales
[consensus expectation: +3% // previous: -8.9%]
[This release will be postponed if the government shutdown persists]
New Home Sales will be another sensitive number for the US economy this week, as the overall consensus of market analysts is that November’s data will show that the negative effects of hurricane season have abated, allowing for a slight uptick from last month’s two-year low point.
Global Economic Data to Watch
Friday, December 28 at 8am EST // German Inflation Rate
[consensus expectation: +1.9% // previous: +2.3%]
Keeping a check on the main driver of the Euro Zone economy here. This month we anticipate seeing the first dip below 2% inflation in Germany going back to the spring; thankfully not by a great deal. A disappointing print closer to 1.5% will raise a few more concerns in European economies as a group.
And just like that, the week will be over. We’re likely in for a pretty calm week for gold prices after this morning (in my view,) but do keep in mind as we discussed on Friday that the shallower markets this week mean there is always some risk that what would normally be a gentle move could begin triggering market stops and become a larger swing.
If it happens, we’ll talk bout it when I see you back here on Friday for a recap of the week. Until then, good luck out there, traders; and happy holidays.
