Daily Analysis 06/11/2025

• GBP/USD Price: The GBP/USD pair trades modestly higher above 1.3050 during Thursday’s European session, reflecting a cautious but steady tone ahead of key monetary policy announcements from the Bank of England (BoE).
• BoE Rates: The BoE’s seventh policy meeting of 2025 is widely expected to keep the benchmark rate unchanged at 4%, following the August 7 rate cut. Markets anticipate a wait-and-see approach as policymakers assess incoming inflation and growth data.
• Inflation Forecasts: The central bank reaffirmed its outlook that inflation will peak around 4% this month, before declining toward the 2% target by mid-2027. This suggests the BoE remains cautiously optimistic about achieving price stability without additional tightening.
• Bailey’s Remarks: Governor Andrew Bailey cited October’s labor market figures as evidence of easing wage-driven inflation, though he acknowledged ongoing tariff uncertainties are weighing on investment confidence across UK businesses.
• Fiscal Tightening: Chancellor Rachel Reeves is preparing to unveil tougher fiscal measures in her November 26 budget, aiming to reduce borrowing needs and restore fiscal discipline amid mounting debt concerns.

Closing statement: The GBP/USD pair’s firm tone above 1.3050 reflects steady sentiment ahead of the BoE decision. While policy stability and cooling inflation support the Pound, fiscal tightening risks and tariff-related uncertainty could cap upside momentum in the near term.

• XAU/USD Price: XAU/USD maintains a positive tone above the $4,000 mark for a second consecutive day on Tuesday, extending its rebound amid ongoing risk aversion and steady safe-haven demand ahead of the European session.
• Shutdown Impact: The US Congressional Budget Office (CBO) warned that the ongoing government shutdown could shave 1–2% off Q4 GDP, amplifying fears of slower economic growth and underpinning gold’s appeal as a defensive asset.
• Trade Tensions: On the geopolitical front, China announced a one-year extension of its suspension on additional tariffs on US goods, formalizing the recent Trump–Xi trade accord and providing limited relief to global markets.
• Tariff Powers: In Washington, Supreme Court justices questioned the Trump administration’s reliance on the IEEPA to justify emergency tariffs, signaling judicial skepticism toward executive overreach in trade policy.
• Labor Data: Traders now await the October Challenger Job Cuts report, which, while not a top-tier release, could offer early signals on labor market health amid delayed government data due to the ongoing shutdown.

Closing statement: Gold’s sustained position above $4,000 reflects resilient safe-haven demand amid US political gridlock and legal scrutiny of tariff powers. While easing trade tensions offer temporary relief, economic uncertainty tied to the prolonged shutdown continues to support bullish momentum in XAU/USD.

• Crude Oil Price: West Texas Intermediate (WTI) crude oil trades higher at $59.81 per barrel, up from Wednesday’s $59.49 close, as prices benefit from a modest risk-on tone and follow-through buying momentum in early European trading.
• Saudi Arabia Cuts: Saudi Aramco sharply reduced its official selling prices (OSP) for Asian buyers, signaling concerns over weak regional demand and aligning with OPEC+’s decision to pause output increases in early 2026 to support market stability.
• Geopolitical Tensions: Russia escalated its military activity in eastern Ukraine following President Putin’s directive to prepare for nuclear testing after similar US remarks last week. The developments added a geopolitical risk premium to oil prices.
• China’s Trade: Traders await China’s October trade figures, expected to confirm continued export strength after last month’s rebound (+8.4% y/y). Any downside surprise could temper demand optimism and weigh on oil sentiment later in the session.
• US Shutdown: The US government shutdown entered its sixth week, marking the longest in history and raising concerns about potential delays in economic data and broader demand-side headwinds for energy markets.

Closing statement: WTI crude continues to edge higher amid geopolitical risks and OPEC+ output discipline, though demand-side uncertainty from Asia and the prolonged US shutdown could cap upside potential. The market’s next direction will likely hinge on China’s trade results and further geopolitical developments.

• DAX Price: The German benchmark index continues to struggle to break above the symbolic 24,000-point mark, with sideways trading dominating recent weeks as investor sentiment remains cautious amid mixed economic data and subdued growth expectations.
• German Growth: The German Chamber of Commerce (DIHK) forecast the economy to stagnate in 2025 after two consecutive years of contraction, with only 0.7% growth projected for 2026, underscoring persistent structural weaknesses in Europe’s largest economy.
• Industrial Output: Germany’s industrial production rose 1.3% MoM in September, below the 3% forecast, following a revised 3.7% decline in August, according to Destatis. The modest rebound highlights a fragile recovery in the manufacturing sector.
• Climate Deal: EU member states agreed on 2040 climate goals but delayed implementation of the ETS2 carbon trading system for households and road transport. This move could lower medium-term inflation projections, giving the ECB more room to maintain an accommodative stance.
• Earnings Season: Investors are closely watching Q3 corporate results from key DAX constituents including Commerzbank, DHL Group, Zalando, Heidelberg Materials, Henkel, Rheinmetall, Gea Group, and Continental, which could provide short-term direction for the index.

Closing statement: The DAX remains locked in consolidation around 24,000 points, constrained by soft economic data and muted growth prospects. Near-term moves will likely depend on corporate earnings momentum and investor reaction to the EU’s climate policy stance.