Happy Monday, traders.
I’m sure we’re all excited and/or struggling to be back at our monitors after a long weekend of relaxing and/or hiding from family.
As we make our way through Monday morning stateside, things are looking pretty rosy (unless you’re overweight crypto) compared to how we left them last week: crude oil seems to finally be finding support, overseas markets had a positive session as futures trading for the US markets is also pointing up, the UK and EU-27 have managed to formally agree on a Brexit package and as a bonus the Italian government seems to be backing down from threatening to cause another Greek-style confrontation with the EU.
And I think you would have to say that this positive start also applies to precious metals markets; in what looks to be a solidly risk-on environment to start the week gold-spot is trading strong around a $1224-1225/oz level while silver seems to be holding well above $14.25.
US Economic Data to Watch This Week
Tuesday, November 27 at 9am EST // Case-Shiller Home Price Index
[consensus expectation: +0.3% MoM // previous: +0.1% MoM]
This is week two of updating housing market data for the US, and just was with Housing Starts and Existing Home Sales last week, we’ll be looking for Case-Shiller to confirm the prevailing positive narrative of the current US economy.
Wednesday, November 28 at 10am EST // New Home Sales
[consensus exp.: +4% MoM // prev.: -5.5%]
A similar story here as above, although the market seems to anticipate a more positive result here as sales of new homes are expected to have rebounded in in October from a dour report in the prior month. Analysts expect the effects of Hurricane Michael to weigh on the October reports somewhat, which leaves the potential for a knee-jerk reaction from the US Dollar and gold should the numbers either print higher than anticipated in the aftermath or fail to retrace September’s price contraction.
Wednesday, November 28 at 12pm EST // FOMC Chair. Powell speaks
Chairman Powell has proven that for the most part he’s unlikely to ever do much to upset the apple cart when speaking publicly, but gold and currency traders will always to well to at least be aware of when he is giving remarks.
Thursday, November 29 at 8:30am EST // Personal Income
[consensus exp.: +0.4% MoM // prev.: +0.2%]
Thursday, November 29 at 8:30am EST // Personal Spending
[consensus exp.: +0.4% MoM // prev.: +0.4%]
Thursday, November 29 at 8:30am EST // PCE Price Index
[consensus exp.: +0.2% MoM // prev.: +0.12%]
While the CPI will always be the headliner when it comes to measuring price inflation in the US, Personal Income, Spending, and the PCE Price Index are also a very useful gage of the price environment from a more personal, “boots on the ground” level. I think these readings can serve as helpful indicators on the wings: economists will be hesitant to say that we have a healthy pace of inflation until seeing that pass-through Personal Income, while declining Personal Spending can be an early warning of a cooling economic cycle.
Thursday, November 29 at 8:30am EST // Initial Jobless Claims
[consensus exp.: +220k // prev. +224k]
Whoa! We actually had a surprise last week! I mean, it was 4,000 claims and that’s more or less expected to “correct” this week but at least if gave me a reason to shout at you about watching the number.
Thursday, November 29 at 2pm EST // FOMC Meeting Minutes
There shouldn’t be anything in the detailed recap of this month’s Fed meeting that dampens market assumptions of a December rate hike, but I think getting a look into the committee’s comments on November’s rough go for equity markets will impact the perceived odds of a successive hike in March 2019 if the troubles persist.
As always, we’ll also be keeping an eye on developing headlines this week; some that we’ve tracked for a while and a couple new ones:
- The next, and possibly the highest, hurdle for PM Theresa May’s Brexit team is getting the agreement approved through a vote in the UK parliament. It’s a tough job that is getting started this week.
- We’ll keep monitoring crude oil markets, to see if this most recent plummet really is over.
- The G20 summit gets started on Friday with the Trump/Xi meeting scheduled for Saturday; odds of anything substantive being accomplished between the two are really low, but I expect the White House’s rhetoric in the lead-up this week will have an impact on markets.
- With reports of a sudden increase in tensions between Ukraine and Russia over the weekend, best to keep tabs in case something more serious kicks off.
And that’s all to kick off the last week of November traders. I wish you all the very best of luck.
We’ll see you back here on Friday for a deeper recap of the week’s trading.