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[Editor's note: As expected, all US economic data originally scheduled for at Wednesday release has been moved to Thursday 12/6, in observance of a national day of mourning. Additionally, FOMC Chairman Powell's testimony before congress, originally set for Wednesday, has been postponed to a later date, TBD.]

Happy Monday, traders. I hope you all had a nice weekend.

I really only spent the first half of mine trying to live-down the shame of having quoted a Drake song in Friday’s recap.

It’s definitely an exciting start to the week for precious metals, with gold finally showing some real commitment above $1230/oz and silver now trading at $14.50 on a boost from better-than-expected (but still murky) headlines following the meeting between Donald Trump and Chinese President Xi on Saturday in Argentina, and a rebound in oil prices. As excited as I am about this tenor to start the week, I’ll be keeping an eye on both of those developing headlines as market actors could easily change their views in the days to come.

There’s also going to be a bit of calendar uncertainty this week, as the US government will only run at a minimum this week—and be fully closed on Wednesday—in mourning and remembrance of George HW Bush, the 41^st President of the United States who passed away this weekend. US equity markets (as well as bond markets, most likely) will be closed on Wednesday as well, and while we expect commodity markets to still trade there may be considerably less volume and volatility. The US economic data scheduled for release on Wednesday may be rescheduled as well; if it is we will update our readers accordingly.

With that, we’ll dive into the economic data and events we’re interested in this week as precious metals traders. But first, I’ll share with you what I think is the only tweet that’s ever choked me up a bit:

Fair winds and following seas, Sir. We have the watch. pic.twitter.com/GdGoBmvKKx

— U.S. Navy (@USNavy) December 1, 2018

…Is it getting dusty in here?

US Economic Data to Watch

Monday, December 3 at 10am EST // ISM Manufacturing PMI

[consensus expectation: 57.5 // previous: 57.7]

Markets will be looking for Manufacturing PMI in November to slow the surprise drop that had been reported for October. Another disappointing number would likely take even more wind out of the economy’s sails and could certainly put another dent in the stock market.

Wednesday, December 5 at 8:15am EST // ADP Employment Change

[consensus exp: +197k // prev: +227k]

The ADP release can be more of a fascination than a reliably useful indicator. Goldman Sachs researchers release a study a couple years ago claiming that the ADP number is not a reliable predictor of Fridays’ monthly Non-Farm Payroll number, but it does have an interesting correlation with the delta between broad market expectations for the NFP number and the actual results. Said more plainly: if the ADP number prints mostly in line with expectations then, more often then not, so will the NFP data—and vice versa.

That said, there’s a trick: the correlation is typically direction-neutral, so an upside surprise in ADP could precede a similar jump in NFP—or it could come ahead of downside shock of the same size.

Wednesday, December 5 at 8:15am EST // FOMC Chairman Powell Statement Release

**This will certainly be rescheduled, as the federal government will be dark on Wednesday to mourn 41’s passing. Once a new date is set, we will update this post.**

Even more so than your standard FOMC Chairman appearance, the Chair’s regularly schedule statement and testimony in front of a congressional panel is usually a non-event—but of course I got caught way offsides saying that ahead of Powell’s comments last week so in an effort to learn from my mistakes I’m going to go ahead and suggest this is a little more worth your attention this time around.

The statement is scheduled to be released at 8:15am EST, ahead of testimony and Q&A scheduled for 10:15am.

Wednesday, December 5 at 10am EST // ISM Non-Manufacturing PMI

[consensus exp: 59.1 // prev: 60.3]

Services PMI likewise fell in October, but actually to a lesser degree than had been anticipated. For that reason, general expectations on the November data are baking in a “catch-down.” Similar to Monday’s Manufacturing PMI, we’ll keep any eye out for any negative data but will offer it a little bit wider berth before panic sets in.

Thursday, December 6 at 8:30am EST // Initial Jobless Claims

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

The market seems to be sticking to the idea that recently heightened claims numbers are an aberration, and that they’ll settle back a bit with each upcoming report. Between layoffs at General Motors and in the energy sector of late, I’m less certain.

Thursday, December 6 at 8:30am EST // Factory Orders

[consensus exp: -2.0% // prev: +0.7%]

Another health-indicator for the US economy. October’s report will have some weakness baked into it due to a drop in aircraft orders.

Friday, December 7 at 8:30am EST // Non-Farm Payroll & Unemployment

[consensus exp: +200k // prev: +250k]

[consensus exp: 3.7% // prev: 3.7%]

While Initial Jobless Claims have been a yawner until recently, the NFP has always been an attentive event for traders tied to the US economy/markets. This month we expect the headline unemployment rate to remain the same even with a small down-tick in jobs added. It’s hard to imagine unemployment getting much lower—though some Fed members anticipate 3.5% next year—and so I think a small increase there would largely be shrugged off by markets. Jobs-added is always a little more volatile and given a rising number of Initial Claims this month and the headlines coming from the GM layoffs, I think traders will be particularly sensitive to any print below +195k as a negative mark for the US economy.

Global Economic Data to Watch

This week is fairly calm in terms of hard data coming out of Europe and Asia that should impact precious metals markets. That said, there are a couple macro stories we’ll continue to watch:

• Brexit. With the “meaningful vote” on Theresa May’s Brexit deal coming to parliament on December 11, the road show will be in full swing this week and the Prime Minister and her team try to convince the people to convince their Members of Parliament that a not-great deal is better than no deal. The odds still suggest she doesn’t have the votes.
• China. Headlines coming out of this weekend’s Trump/Xi meeting at the G20 were certainly more positive than many expected, myself included, announcing a brief “cease-fire” in the US-China trade war. The “deal,” however, is woefully short on specifics as of this morning so we’ll be keeping an eye on developments and comments both from China and the White House.

And that’s how things look for us in the week ahead, traders. Best of luck out there, and I’ll see you back here Friday for a deeper recap of the week in markets.