Daily Analysis 07/11/2025

• GBP/USD Price: The GBP/USD pair eases to around 1.3120 on Friday after a 1% rise over the past two sessions, as traders lock in profits ahead of fresh policy and fiscal developments in the UK.
• BoE Rates: The Bank of England kept its base rate unchanged, signaling policy caution ahead of the government’s Autumn Budget in late November, reflecting the central bank’s desire to balance slowing inflation with economic resilience.
• BoE's Bailey: Governor Andrew Bailey indicated that rate cuts may begin before Christmas, though he emphasized that future adjustments depend on inflation trends, reinforcing a data-dependent stance amid evolving economic conditions.
• BoE Policymakers: BoE members Sarah Breeden, Dave Ramsden, Swati Dhingra, and Alan Taylor backed a more accommodative stance, suggesting that if disinflation continues, the Bank Rate could gradually move lower in coming months.
• Fiscal Outlook: Attention now turns to the November 26 Autumn Budget, where tax adjustments and fiscal tightening could shape near-term growth prospects and influence sterling sentiment.

Closing statement: GBP/USD shows signs of consolidation after a strong rally, as markets digest BoE’s dovish tone and brace for fiscal policy signals from the upcoming Autumn Budget. The pound’s short-term direction will likely hinge on inflation data and fiscal clarity heading into year-end.

• XAU/USD Price: XAU/USD extends gains above $4,000, as renewed risk aversion boosts investor appetite for safe-haven assets. Persistent political and economic uncertainty in the US continues to support the precious metal’s upside momentum.
• Government Shutdown: The record-long 38-day government shutdown deepens market anxiety, with the CBO estimating a 1–2% GDP drag in Q4. This extended impasse underscores rising fiscal strain and potential economic slowdown, reinforcing gold’s appeal as a hedge.
• Supreme Court: The US Supreme Court’s scrutiny of presidential emergency tariff powers introduces additional policy uncertainty, with even conservative justices questioning the scope of executive authority, further bolstering gold’s safe-haven demand.
• Labor Market: The US Challenger Report revealed a sharp 183% monthly surge in layoffs, totaling 153,074 in October. Such deterioration in the job market heightens recession fears and may pressure the Fed toward a more accommodative stance.
• Sentiment Indicators: With the shutdown restricting key economic releases such as NFP and unemployment data, traders turn to the University of Michigan’s Consumer Sentiment Index for clues on household confidence and spending trends.

Closing statement: Gold remains firmly supported above $4,000, as persistent US political deadlock, labor weakness, and rising uncertainty strengthen safe-haven inflows. Unless a fiscal resolution emerges soon, XAU/USD could remain well-bid heading into next week.

• Crude Oil Price: West Texas Intermediate (WTI) climbs to around $60.00 per barrel, marking a modest rebound from Thursday’s $59.40 close. However, the move appears technically driven, as broader macroeconomic headwinds limit upside potential.
• Political Gridlock: The prolonged US government shutdown continues with no resolution in sight, as Democrats vow to block GOP-led funding efforts. The deepening standoff fuels demand-side concerns, casting doubt over near-term energy consumption.
• Central Asia: In the US, President Trump met leaders from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan to strengthen ties on critical minerals, energy, and trade.
• China’s Export: A surprise 1.1% y/y contraction in Chinese exports reflects weaker global trade momentum and lingering tariff uncertainties. The slump raises demand-side risks for oil, given China’s role as the world’s top crude importer.
• US Inventories: The 5-million-barrel surge in US crude stockpiles underscores softening domestic demand and potential oversupply pressures, dampening sentiment despite short-term price resilience.

Closing statement: Oil prices remain supported above $60, but rising inventories, weak Chinese trade data, and ongoing US political paralysis weigh on the medium-term outlook. Unless demand fundamentals stabilize, WTI may face renewed downside pressure in the sessions ahead.

• DAX Price: The German benchmark index trades around 23,790 points, hovering near its weekly low as risk sentiment remains fragile. Persistent economic uncertainty and weak corporate earnings continue to limit investor appetite for equities.
• Steel Sector: Chancellor Friedrich Merz warned of an “existential crisis” in the steel industry, urging stronger European economic self-reliance. The government summit highlighted strategic vulnerabilities in energy costs and industrial competitiveness.
• Industrial Output: September industrial production rose 1.3% m/m, missing forecasts of 3.0%, as gains in automotive and electronics were partially offset by mechanical engineering weakness. Despite a rebound from August’s deep contraction, output remains below last year’s levels.
• Daimler Truck: The automaker reported a sharp drop in Q3 operating profit amid a weak North American truck market, though it reaffirmed full-year guidance. The report underscores uneven global demand and sectoral challenges in heavy industry.
• Business Sentiment: The DIHK sentiment index declined to 93.8, staying deep in pessimistic territory as corporate expectations deteriorate. The reading signals that German firms remain cautious about growth prospects going into 2026.

Closing statement: The DAX remains vulnerable amid weak industrial momentum and gloomy business sentiment, with limited upside catalysts on the horizon. Unless policy support or stronger external demand emerges soon, further downside pressure toward the 23,500 region cannot be ruled out.