Daily Analysis 05/09/2025

• GBP/USD Price: GBP/USD is showing limited momentum, trading around 1.3455 after earlier volatility this week. The pair remains constrained within a narrow range near 1.3430–1.3460, signaling indecision.
• Fiscal Outlook: UK Finance Minister Rachel Reeves confirmed the Autumn Budget will be presented on November 26, with expectations of a cautious stance as she faces pressure to maintain fiscal discipline.
• Retail Sales: Retail sales in the UK showed resilience, rising 0.6% MoM in July, building on June’s revised 0.3% increase. This suggests steady consumer demand despite broader economic challenges.
• Employment Data: The US ADP report revealed a 54K increase in private sector jobs in August, falling short of forecasts. Weakness in manufacturing contrasted with relative strength in services, underscoring a slowing but uneven labor market.
• Fed Rate Cut: Markets continue to push for a September Fed rate cut, with traders focusing heavily on worsening US employment trends as justification for policy easing.

Closing statement: GBP/USD is stuck in a tight range, with support from UK retail data but capped by market caution ahead of the Fed’s policy decision. Near-term direction hinges on upcoming US labor releases.

• XAU/USD Price: Gold paused on Thursday after seven consecutive sessions of gains, consolidating near $3,550 per troy ounce. This comes after Wednesday’s climb to a fresh all-time high near $3,580, highlighting continued bullish momentum.
• Services Data: The ISM Services PMI rose to 52.0 in August, beating expectations of 51.0 and July’s 50.1. Stronger activity in business output and new orders signals resilience in the non-manufacturing sector, tempering some Fed easing bets.
• Trade Balance: The US trade deficit widened to -$78.3 billion in July, the largest in four months and above expectations. The sharp deterioration was driven by companies frontloading imports ahead of new tariffs, raising concerns about external imbalances.
• China Market: Chinese equity markets retreated after reports of new regulatory measures to cool speculation. Authorities are moving to curb bubble risks following a recent sharp rally, which could dampen regional investor sentiment.
• Fed Outlook: NY Fed President John Williams signaled gradual interest rate cuts remain likely if economic conditions evolve as expected, aligning with market pricing for easing later this year.

Closing statement: Gold remains in a consolidation phase near record highs, supported by Fed dovish expectations but capped by firmer US data. The balance between tariff-related risks, Fed outlook, and Chinese market signals will guide near-term momentum.

• Crude Oil Price: West Texas Intermediate (WTI) traded neutral on Friday near $62.90 per barrel, holding steady after Thursday’s close at $63.06. Price action reflects consolidation as markets await fresh drivers.
• OPEC+ Policy: OPEC+ may begin unwinding 1.65 million bpd of cuts, equal to around 1.6% of global demand. This comes on top of the previously agreed 2.2 million bpd output increase between April and September, reinforcing the theme of gradually rising supply.
• Political Risk: Fed nominee Stephen Miran stressed central bank independence, while avoiding direct comment on Trump’s power to fire Fed members. His remarks underscore ongoing political tensions that indirectly influence risk sentiment and commodities.
• China Data: Traders are eyeing China’s August NBS PMI release on Sunday, expected to rise slightly to 49.5 from July’s 49.3. A stronger reading could support oil demand expectations, while another miss may weigh on sentiment.
• Economic Calendar: Upcoming US data releases—jobless claims, ADP private payrolls, and ISM services PMI—will provide important signals on growth and demand outlook, potentially influencing near-term oil pricing.

Closing statement: Crude oil remains rangebound as markets balance rising OPEC+ supply with uncertainties over demand from China and the US. The next decisive move likely hinges on China’s PMI results and US labor market data.

• DAX Price: The DAX edged 0.12% higher in early Thursday trading at 23,621 points, extending Wednesday’s half-percent gain. Momentum remains modest, reflecting cautious investor sentiment.
• Economic Outlook: The Kiel Institute for the World Economy (IfW) expects GDP growth of just 0.1% in 2025, after two years of contraction. The forecast suggests Germany’s economy is still struggling to gain meaningful momentum despite improving sentiment indicators.
• Industrial Orders: German industrial orders fell 2.9% MoM in July, following June’s 0.2% decline. The unexpected drop signals continued weakness in manufacturing activity, reinforcing concerns about fragile business demand.
• Geopolitical Tensions: Russian President Vladimir Putin ruled out foreign troop presence in Ukraine as part of a peace deal, creating further obstacles for negotiations. His comments highlight the persistence of geopolitical risks that continue to weigh on European markets.
• US Trade: US President Donald Trump announced plans to impose tariffs on semiconductor imports from firms not producing in the US. While not directly targeted at Germany, this policy could ripple through global supply chains, potentially affecting DAX-listed technology companies.

Closing statement: The DAX is holding ground but remains pressured by weak German industry data, muted GDP growth forecasts, and persistent geopolitical risks. External factors, including US tariff policy and global tech supply chains, may further shape near-term direction.