GoldPrice.

Happy Monday, traders. And welcome back.

As we get into the week ahead, gold is trading in a strong position above $1245/oz, having run into some resistance overseas at $1250. The mess in the UK and this morning’s sharp selling in equities will likely continue to pressure investors into risk-off assets like precious metals and I suspect we’ll be revisiting $1250 before the week is out.

The Missing “Meaningful Vote”

The biggest macro story I have my eye on going into this week is the UK’s parliamentary vote on whether or not to approve the “final” negotiated deal for Brexit, and how it a December 11 vote would almost certainly fail.

Then, at 10:30am EST, Prime Minister Theresa May announced in an address to the House of Commons that she and her cabinet plan to pull and postpone the vote. I’ll be honest: I don’t know what happens from here. Nobody does, really. Partly because what’s happening within the UK government—and its implications for global trade and diplomacy—is wholly unprecedented. Partly because it’s just a huge mess. Sterling is lower than it has been in 18 months, and 30 minutes ahead of the European market-close the Euro isn’t doing great either.

So, we’ve pulled the vote from our calendar for Tuesday, but we will be following along with the developments this week, which include a summit with EU leaders before the weekend.

US Economic Data to Watch

Tuesday, December 11 at 8:30am EST // Producer Prices Index

[consensus expectation: 0% // previous: +0.6%]

It’s fairly reasonable for markets to anticipate a slowdown from the pace of October’s PPI increase, which was the largest monthly gain in the number since 2012. The majority of analysts predict producer prices to be unchanged this month, due mainly to stable core prices but accounting for the sharp drop in energy prices in November. As such, the “core” number (PPI ex. food and energy prices) should show a modest increase.

Wednesday, December 12 at 8:30am EST // Consumer Inflation

[CPI consensus exp.: +2.2% YoY / prev.: +2.5%]

[Core CPI consensus exp.: +2.2% YoY / prev.: +2.1%]

Consumer inflation should continue to stick within the Fed’s “symmetrical” target of 2%, and like PPI on Tuesday will remain mostly unchanged from last month in the core number while headline CPI will show some slowdown caused by the rout in energy prices last month.

Thursday, December 13 at 8:30am EST // Initial Jobless Claims

[consensus exp.: +225k // prev.: +231k]

Jobless claims have increased for three weeks straight, and market consensus has been on the losing side of that bet every time. The market is stubborn though, and (like a lot of us) believes in reversion to the almighty mean. How the market would react to another “unexpected” uptick this week will depend a lot on how US economic data looks over the three days preceding it. That said, the specific impact of jobless claims on assets like gold will be a little more difficult to parse this week, as the data will be released right at the start of what’s expected to be an important press conference for the European Central Bank.

Friday, December 14 at 8:30am EST // Retail Sales

[Retail consensus exp.: +0.2% MoM // prev.: +0.8%]

[Core retail consensus exp.: +0.5% MoM // prev.: +0.3%]

We’re entering the noisy phase of the year for US retail numbers, as businesses should be getting a sales boost from holiday shoppers. I think the recent turmoil in equities has come too late in November to scare Americans away from checking off their wish lists this year.

Global Economic Data to Watch

Tuesday, December 11 at 5am EST // German ZEW Econ. Sentiment

[consensus exp.: -25 // prev.: -24.1]

Lately there hasn’t been a lot of positive economic news coming out of Germany, the lone workhorse of the Euro Area economy, and with conflict and uncertainty rising elsewhere in the continent (see Brexit, the Italian budget, and France being literally on fire this weekend) there’s increasing pressure for Merkel’s economy to carry the water again. I think there may be a surprise gain in confidence for this month’s read given the pro-establishment outcome of last week’s leadership elections, but another drop in sentiment could put some real fear into Euro-based investors.

Thursday, December 13 at 7:45am EST // ECB Rate Decision

Thursday, December 13 at 8:30am EST // ECB Press Conference

While no change in short-term rates is expected to be announced at this month’s meeting, expectations are set for an announcement of the end of the ECB’s quantitative easing program of bond purchases. We’ll also be keeping an eye on the ECB’s commentary in the press conference about recent developments on Brexit and in the French and Italian economies that have currency markets concerned.

And that’s it for our look-ahead this week. Keep in mind that alongside the relatively light calendar of impactful economic data, markets will be tracking developments in the UK’s Brexit saga and the roiling US-China trade conflict.

Best of luck out there, and I’ll see you back here Friday to recap the week that was.