GoldPrice.

Hey there traders, happy Monday to you.

It looks like everybody, including the US government, is back to work this week with a packed economic calendar for the US economy and the rest of the world. Our centerpiece will be the first FOMC meeting of 2019, as we keep an eye on the UK’s Brexit mess and follow the negotiations centered around keeping the federal government fully operational past February 15 while also trying to assess the damage done by the longest government shutdown in American history.

The Congressional Budget Office sees the government shutdown as an economic blip totaling $3 billion https://t.co/K4dj1uCM8x

— Bloomberg Economics (@economics) January 28, 2019

As we begin the week, at time of writing gold spot remains highly perched, trading above $1303/oz following a brief attempt this morning to knock it off of its 13-handle. With the FOMC expected to deliver a dovish report on Wednesday, gold may find another leg up this week. Conversely, of course, a more aggressive tone from Jerome Powell & Co. could dim gold’s luster if yellow metal still trades around support.

US Economic Data to Watch

Tuesday, January 29 at 9am EST // Case-Shiller Home Price Index

[consensus expectation: +0.5% // previous: +0.4%]

Despite what your eyes might tell you, an increase of +0.5% (or more) in the 20-city index of home prices would be notable, but the consensus projection is well supported by similar gains in other home price trackers.

Wednesday, January 30 at 8:15am // ADP Employment Report

[consensus exp.: +185k // prev.: +271k]

We expect a reversion towards the mean after last month’s huge surprise to the upside, but 185k is still a healthy number for the US labor market.

Wednesday, January 30 at 8:30am // Q4 GDP (Adv.) **

**Q4 GDP will most likely be rescheduled due to data delay as a result of the government shutdown.

[consensus exp.: +2.6% // prev.: +3.4%]

Wednesday, January 30 at 2pm EST // FOMC Meeting + Press Conference

[no rate change expected]

Recent comments by a diverse mix of FOMC committee members suggest that growth concerns (domestically and abroad) weigh enough on their minds that the market now expects another dovish Fed meeting, with no change to the short-term interest rate. The language of the committee’s statement will likely downgrade its guidance of the rate path somewhat and, while the possibility of a formal change to current balance sheet policy is in play, most analysts assume it will only be referred to in Chairman Powell’s press conference. Ryan Page will have a more in-depth preview of the FOMC for you later this week.

Thursday, January 31 at 8:30am EST //   Employment Cost Index (Q4)

[consensus exp.: +0.8% QoQ // prev.: +0.8%]

Thursday, January 31 at 8:30am EST // Personal Income + Spending

[Income consensus exp.: +0.5% // prev.: +0.2%]

[Spending consensus exp.: +0.3% // prev.: +0.4%]

More “okay” news expected for the US labor market (you’ll notice a theme this week) as wage growth, personal incomes and personal expenditures are expected to remain at the same slightly-better-than-tepid pace as the prior month.

Thursday, January 31 at 8:30am EST // PCE Price Index

[consensus exp.: flat MoM // prev.: +0.06%]

[Core PCE consensus exp.: +0.2% // prev.: +0.15%]

CPI and PPI are both (along with import price data) inputs and forerunners of PCE data, and their most recent releases support a mostly flat December when comparing month-to-month.

Thursday, January 31 at 8:30am EST // Initial Jobless Claims

[consensus exp.: +215k // prev.: +199k]

The market is looking for a rebound back above 210k new jobless claims following a historical low last week, and I suspect there’s good chances of a (slight) revision to that sub-200k report.

Friday, February 1 at 8:30am EST // Non-Farm Payrolls

[consensus exp.: +170k // prev.: +312k]

Friday, February 1 at 8:30am EST // Unemployment Rate

[consensus exp.: 3.9% // prev.: 3.9%]

As with the precursor ADP report, an appropriate “correction” from December’s blowout jobs report is expected, as market analysts are predicting an NFP number in the healthy 160-180k range, while the headline unemployment rate is expected to remain just below 4% and near the lower-bound of sustainability.

Friday, February 1 at 10am EST // ISM Manufacturing PMI

[consensus exp.: 54.2 // prev.: 54.1]

We look for manufacturing PMI to remain mostly unchanged compared to last month, which saw a sharp decline in the metric. A slowing of the fall—or a slightly possible uptick vs. December— could put some legs into a softening US Dollar.

Friday, February 1 at 10am EST // University of Michigan Consumer Sentiment

[consensus exp.: 90.7 // prev.: 90.7]

While the temporarily halted government shutdown likely didn’t do much to encourage exuberance, the US stock market’s January rebound should keep this soft metric afloat. For now.

Global Economic Data to Watch

Tuesday, January 29 at 2pm EST // Parliamentary Brexit Vote

Everyone watching is expecting another doomed vote for Theresa May’s government on Tuesday afternoon, as she’s essentially bringing the same Brexit deal to the House of Commons, but this time it has “Plan B” stenciled on it. What will follow is anticipated to be a tug of war between the two main factions in parliament—the Labour part vs. May’s own conservative Tories—over the future of Brexit as the power and responsibility of negotiating will transfer from May’s government to the parliament itself

Wednesday, January 30 at 5am EST // Euro Area Business Confidence

[consensus exp.: 0.75 // prev.: 0.82]

The bad news looks likely to continue for the Euro Zone economy this week and seep into softer data like confidence and sentiment ratings. Euro Area Business Confidence being a case in point, as the number that reached its lowest point in over a year last month is expected to deteriorate further. Should growth data for Europe—both “hard” and “soft” continue this weakening trend, it will at some point begin feeding into projections for gold and other safe-have assets; should the rest of the world’s major economies slow to a degree that even a weakening US economy is still top of the heap, it’s tough to imagine the over-priced US Dollar losings steam.

Thursday, January 31 at 5am EST // Euro Area GDP (Q4)

[consensus exp.: +0.2% QoQ // prev.: +0.2%]

As is often the case, for Q4 analysts anticipate that still (somewhat) growing economies in the core (France, Germany) will offset weaker conditions reported in the periphery (Italy, Spain, etc.)

Thursday, January 31 at 8:45pm EST // China Caixin Manufacturing PMI

[consensus exp.: 49.5 // prev.: 49.7]

Still keeping an eye on the story in China. While some (or any) measure of success in the ongoing trade talks between the US and China might eventually begin to pass through to the Chinese economy over all (along with their continuing efforts at stimulus,) the data for now is expected to continue applying downward pressure on the outlook and, to some degree, buoy the trade-weighted Greenback.

Friday, February 1 at 3:55am EST // German Manufacturing PMI

[consensus exp.: 49.9 // prev.: 51.5]

Were a major read on German manufacturing, the engine room of manufacturing for Europe as a whole, slip into contractive territory—as the consensus expects it to do just barely this month—it would be another strong headwind applied to a European economy that seems more and more rickety each month.

Friday, February 1 at 5am EST // Euro Area Inflation

[consensus exp.: +1.4% YoY // prev.: +1.6%]

[Core Inflation consensus exp.: +1.0% YoY // prev.: +1.0%]

See my comments above on German manufacturing and Euro Area Sentiment to reiterate why “the best we can say is it’s not getting worse” doesn’t feel particularly inspiring for Europe’s economy.

And that’s how the week lays out for us, traders. I, for one, am excited to have so much to talk about again. As I mentioned, my colleague Ryan Page will have a preview of this week’s FOMC meeting for you coming up, while I’ll follow up on Thursday with a recap. And, as always, I’ll be back here on Friday for a recap of what looks to be a fun week in commodities and currency markets.