Daily Analysis 07/05/2026

• GBP/USD Price: GBP/USD is advancing for the third consecutive day, trading around the 1.3600 level. The sustained buying interest suggests improving sentiment toward the British Pound in the short term.
• Political news: Attention is turning to UK local elections, where the Labour Party could face significant losses. This may increase political pressure on Keir Starmer and create uncertainty for UK markets.
• PMI data: The UK’s April S&P Global Composite and Services PMI figures exceeded expectations, indicating that private sector activity remains relatively resilient. This provides support for the Pound despite a softer broader economic environment.
• Labor market: The US ADP private payrolls report came in stronger than forecast at 109K versus 99K expected. This reinforces the view that the US labor market remains relatively stable, supporting the US Dollar.
• Upcoming events: Investors are awaiting remarks from Christine Lagarde and the upcoming US Nonfarm Payrolls report. Both events are expected to significantly influence market expectations and currency movements.

Closing statement: GBP/USD remains supported by strong UK economic data and positive momentum, though political uncertainty and resilient US labor figures may limit upside potential. The near-term outlook is cautiously bullish ahead of key macroeconomic events.

• XAU/USD Price: Gold is maintaining gains for the third consecutive day, holding above the $4,700 level and remaining close to a one-and-a-half-week high. This reflects continued investor demand despite mixed macroeconomic signals.
• Middle East: President Donald Trump paused “Project Freedom” operations in the Strait of Hormuz, citing progress in negotiations mediated by Pakistan. However, skepticism remains after Iranian officials reportedly dismissed the latest US proposal.
• Fed commentary: Fed's Alberto Musalem delivered hawkish comments regarding monetary policy, but the US Dollar failed to gain significant traction. Improved market sentiment and hopes for a diplomatic breakthrough limited safe-haven demand for the USD.
• Technology sector: US tech firms continue to outperform, setting the scene for tech globally: Cybersecurity firm Fortinet +15% saw a big earnings beat with service billings growth reaccelerating to 27%.
• China inflation: China’s CPI and PPI are expected to rise due to increasing commodity costs and seasonal factors. Higher producer prices in China could reinforce global inflation concerns and support demand for inflation-hedging assets such as gold.

Closing statement: Gold remains supported by geopolitical uncertainty and rising inflation expectations, even as risk appetite improves. The near-term outlook is moderately bullish, though stronger risk-on sentiment and hawkish Fed expectations may cap further upside.

• Crude Oil Price: WTI crude is consolidating below the $93.00 level as traders evaluate the probability of a potential peace agreement between the United States and Iran. The pause in upward momentum suggests uncertainty over future supply risks.
• US Fuel: US oil product exports jumped to a record 8.2 million barrels per day, driven by global efforts to replace disrupted fuel supplies caused by the Hormuz crisis. Diesel exports led the increase, highlighting strong international demand.
• Aviation fuel: Israel agreed to supply jet fuel to Germany after disruptions to European fuel flows intensified. This demonstrates how the Strait of Hormuz crisis is affecting broader energy logistics beyond crude oil itself.
• Energy companies: Eni shareholders approved a €4 billion share buyback program along with updated corporate governance measures. The company is prioritizing shareholder returns despite volatile market conditions.
• Supply shock: Asian economies are experiencing significant stress from reduced Gulf oil supplies, with imports reportedly down around 30%. Insufficient replacement supply from the US and Russia is increasing inflationary pressure and weighing on economic growth.

Closing statement: Crude oil remains supported by ongoing supply disruptions and strong global fuel demand, though hopes for a US-Iran agreement are limiting further gains. The near-term outlook is cautiously bullish, with geopolitical developments remaining the primary driver of price direction.

• DAX 40 Price: The DAX is attempting another move toward the 25,000-point threshold, trading near 24,930 points. The index continues to show resilience despite geopolitical and economic headwinds.
• AI regulation: European Union lawmakers and member states reached a provisional agreement to delay the implementation of softened AI regulations. This could provide temporary relief for technology companies concerned about compliance costs and regulatory pressure.
• Trade pressure: US Trade representative Jamieson Greer criticized the European Union for failing to meet tariff-related commitments. The comments raise concerns about renewed trade tensions between the US and Europe.
• Energy partnerships: A spokesperson for German Federal Ministry for Economic Affairs and Energy confirmed that Germany is holding constructive talks with multiple countries, including Israel, regarding energy supplies. This reflects ongoing efforts to secure energy stability amid disruptions linked to the Strait of Hormuz crisis.
• Fuel costs: Lufthansa warned that higher jet fuel prices could add approximately $2 billion in costs this year. The shortage in kerosene supply caused by the Hormuz disruption is becoming a major burden for the European aviation industry.

Closing statement: The DAX remains close to record territory, supported by resilient market sentiment, though rising energy costs and trade tensions present meaningful risks. The near-term outlook is cautiously bullish, but sustained gains may depend on geopolitical stabilization and energy market normalization.