GoldPrice.

Happy Monday, traders. Welcome to another week’s macroeconomic preview. With Valentine’s Day (in the US) waiting for us on Thursday, I’ve tempted to been tempted to open this week’s preview with a heart-shaped box’s worth of bad puns (“Romancing the Shiny Yellow Stone,” anyone?) Luckily for all of us, this past weekend was my first chance to really embrace the end of “dry January” and the hangover has centered itself around the quippy part of my brain. Come Easter, we may not be so lucky.

As we take a look at the macroeconomic calendar for this week, gold has shown some shakiness beginning with selling at the Sunday-night open which continued through Europe until the New York session. Constructively, spot price seems to have once again show strong support at and around the major psychological handle of $1300/oz. At the time of writing, gold is looking likely to attempt a run back above $1310.

Along with the data releases this week, we’ll be watching three stories that by now should be pretty familiar to regular readers. The biggest focus will be on the ongoing negotiations to keep the Federal government open beyond this Friday’s funding deadline; behind that will be attention paid to whatever for talks are taking between the US and China over the current trade-truce that expires on March 1. Lastly, we’ll keep an eye on another round of “meaningful” voting in the UK’s House of Commons that could (but likely will not) change the complexion of Brexit planning.

With those broader stories in mind, here’s a look at this week’s scheduled data releases in the US and abroad.

US Economic Data to Watch

Tuesday, February 12 at 6:30pm EST // Cleveland Fed President Mester Speaks

After shifting to slightly more dovish rhetoric towards the end on 2018, Cleveland Federal Reserve President Loretta Mester took a few steps back towards her usual role of Fed hawk with last week’s comments. As she makes additional public comments this week I’ll be interested to see if that reversion to the mean holds.

Tuesday, February 12 at 7:30pm EST // Kansas City Fed President George Speaks

Like Mester, KC Federal Reserve President Esther George has a reputation as a hawk that she demonstrated the last time she was rotated into a voting position in 2016. Watchers will be interested to see her commentary on the FOMC’s pause.

Wednesday, February 13 at 8:30am EST // CPI Inflation Rate (Jan)

[consensus expectation (headline): +1.5% YoY // previous: +1.9%]

[consensus exp. (core): +2.1% YoY // prev.: +2.2%]

With prices of a majority of staples expected to remain firm, lower energy prices are expected to take a bite out of headline CPI and to a lesser extent (as a pass-through to airfares,) the core inflation number. A move farther away from 2% in headline inflation would play into the hands of Fed members like President of the St. Louis Fed James Bullard, who believe the failure to meet and hold the 2% inflation target is an argument for a longer pause and/or the beginning of rate cuts.

Thursday, February 14 at 8:30am EST // Retail Sales (Dec)

[consensus exp.: +0.1% MoM // prev.: +0.2%]

The softening sales number from department stores and other retail centers (which some analyst teams, like Goldman Sachs’, believe is attributable to Thanksgiving and Black Friday having landed a little earlier in November than usual) along with the plummeting price of oil (passed through to gas prices) in December line up for a slight decline in already slow retail growth. This is the kind of macro data that may put a dent in the run the US Dollar has been on to start the week, and give gold-spot the tailwind it would need to rise back above $1310/oz.

Thursday, February 14 at 8:30am EST // PPI (Jan)

[consensus exp.: +0.1% MoM // prev.: -0.2%]

Third verse, same as the first (two): while the core number (PPI ex-food and energy) should be solid for January, the headline release will be dented by lower energy prices. With WTI crude having at least regained the $50-handle by the end of January, we’ll see if this kind of effect begins to roll-off in February’s inflation data.

Thursday, February 14 at 8:30am EST // Initial Jobless Claims

[consensus exp.: 225k // prev.: 234k]

Expect some (slight) continued reversion from the high print of a couple weeks back.

Friday, February 15 at 8:30am EST // NY Empire State Manufacturing Index

[consensus exp.: 7.0 // prev.: 3.9]

We’re expecting this month’s ES number to show a little bit of revitalization after two straight months of surprisingly strong declines. If it were to disappoint a third time, I think this (like a closer-to-zero retail number) is the kind of release that could drag the dollar back a bit and give gold prices a lift.

Friday, February 15 at 9:15am EST // Industrial Production (Jan)

[consensus exp.: +0.1% MoM // prev.: +0.2%]

As industrial production in other major global economies continues to slow, I think keeping an eye on America’s will provide us with some insight into whether the US vs. RoW (Rest of the World) growth differential will maintain or widen in the near term (gold down, Dollar up); or if that gap will shrink more quickly (gold up, Dollar down.)

Friday, February 15 at 9am EST // Univ. of Michigan Consumer Sentiment

[consensus exp.: 94.0 // prev.: 91.2]

January’s number was a steep drop from the near-100pt level that this “soft data” report had maintained for some time. In February, sentiment is expected to pick up to a noticeable degree thanks largely to the (so far temporary) end of the Federal government shutdown and the banner January for US equity markets.

Global Economic Data to Watch

Wednesday, February 13 at 5am EST // Euro Area Industrial Production (Dec)

[consensus exp.: -0.4% MoM// prev.: -1.7%]

Industrial production in the European Union’s “core four” (Germany, France, Spain and Italy) showed some gains in December, but not enough to halt and overall slowing in the Euro Area as a whole. This is one of the key macroeconomic inputs that will need to change in order for the “weaker US Dollar in 2019” calls to materialize.

Wednesday, February 13 at 6:50pm // Japan Q4 GDP

[consensus exp.: +1.4% YoY // prev.: -2.5%]

Likewise, currency analysts that have been calling for a Dollar-top will hope to see Japanese growth pull itself up from Q3’s contractionary number, putting a boost into the Yen and gold prices alongside it.

Thursday, February 14 at 2am EST // Germany Q4 GDP

[consensus exp.: +0.1% QoQ // prev.: -0.2%]

Just about anybody with a vested interest in the health and growth of the European economy-- that includes those holding long gold positions, physical or otherwise, who will hope to see a stronger common currency in 2019 slowing the run of the gold-opposing US greenback—will be counting on Germany to report an expansionary GDP number for Q4. That’s expected to materialize, as the idiosyncratic drag from controversy and correction in the all-important auto sector roll away. If it doesn’t, however, I would expect it to put some really pressure on an EUR that is already beginning this week on a shaky foot.

That, traders, is your week ahead. I wish you all the best of luck this week in trading—certainly better luck than I’ve had trying to come up with cringy Valentine’s Day pun to tie this one off.

Maybe something about…a box of chocolates?

Yeah, I’ll just see myself out.

See you back here on Friday, traders.