Daily Analysis 09/09/2025

• GBP/USD Price: GBP/USD extends gains toward 1.3600, its highest level since mid-August, reflecting renewed strength in the pound against the US Dollar during Tuesday’s European session.
• Retail Sales: The BRC Like-for-Like Retail Sales rose 2.9% YoY in August, beating expectations and marking the strongest growth in four months. This suggests consumer demand remains more resilient than anticipated.
• Rate Cut: HSBC and Deutsche Bank delayed their BoE rate cut forecasts to 2026, citing sticky inflation pressures. This shift supports GBP sentiment, as monetary easing may come later than markets initially expected.
• Growth Concerns: A BoE survey showed UK firms cutting jobs at the fastest pace since 2021, pointing to a softer labor market and underlying growth challenges despite robust retail figures.
• Political Warnings: Conservative leader Kemi Badenoch warned of potential IMF-style intervention if growth plans fail, drawing parallels to the 1976 bailout and fueling concerns over fiscal credibility.

Closing statement: GBP/USD is buoyed by retail data and delayed BoE rate cut bets, but risks from a weakening labor market and political warnings temper the outlook. Traders will watch for upcoming UK economic data and BoE commentary to confirm momentum toward 1.3600 and beyond.

• XAU/USD Price: Gold (XAU/USD) extends its rally beyond $3,600 per ounce, hitting fresh record highs on Monday as safe-haven demand and rate cut bets support upside momentum.
• US Data: Traders eye the BLS preliminary benchmark revision to Establishment Survey Data due September 9, which could reshape labor market perceptions and influence Fed policy outlook.
• Fed Rate: Weak jobs data reinforced expectations of three consecutive Fed rate cuts, with some investors pricing a possible 50bp move in September, signaling a dovish shift in policy stance.
• Market Odds: According to the CME FedWatch Tool, markets now assign ~90% odds of a 25bp cut and a 10% chance of a 50bp cut, up sharply from near zero a week earlier, fueling bullish momentum in gold.
• Geopolitical Uncertainty: Political turmoil in Japan following PM Shigeru Ishiba’s resignation has pressured the yen and added to safe-haven flows, further supporting gold’s climb.

Closing statement: XAU/USD benefits from dovish Fed expectations and geopolitical risks, reinforcing its breakout above $3,600. Near-term focus shifts to the BLS data revision and Fed commentary, which could determine whether gold sustains record highs or consolidates.

• Crude Oil Price: West Texas Intermediate (WTI) crude edged higher on Tuesday, trading around $62.40 per barrel, modestly up from Monday’s close of $62.18, as traders balanced geopolitical and trade risks.
• Russia Sanctions: The European Union is considering fresh sanctions on Russia’s oil sector, including curbs on major energy firms and trade flows. EU officials are in talks with Washington to ensure coordinated action with the US.
• Supply Risks: Gunvor, a leading independent oil trader, warned that global crude flows could face major disruptions if the US expands sanctions on Russian oil buyers. India, in particular, remains in Washington’s crosshairs due to its continued purchases of discounted Russian barrels.
• US Trade: Treasury Secretary Scott Bessent defended Trump’s tariff strategy, expressing confidence it will be upheld by the Supreme Court, though he acknowledged potential risks if the administration loses its legal battles.
• Data Watch: With a light economic calendar this week, oil markets are focused on US inflation indicators—PPI due Wednesday and the more critical CPI on Thursday—which could shape Fed policy expectations and broader market sentiment.

Closing statement: WTI crude is stabilizing above $62 as traders weigh supply risks from sanctions and tariffs against muted demand signals. The upcoming US CPI report will be key in determining whether oil prices extend their rebound or remain rangebound.

• DAX Price: The DAX traded around 23,770 on Tuesday, opening slightly lower after Monday’s strong gains. Investors remain cautious as sentiment wavers despite the index’s recent rebound.
• Fiscal Challenges: Chancellor Friedrich Merz warned that Germany’s welfare state model is no longer financially sustainable, marking a turning point in the debate on public spending and the long-term foundations of the German economy.
• Trade Weakness: German exports to the US dropped 7.9% in July to €11.1 billion, marking the fourth straight monthly decline and the lowest level since December 2021. Persistent tariffs continue to weigh on Europe’s largest economy, despite signs of resilience in parts of its industrial sector.
• Investor Sentiment: Eurozone investor morale deteriorated sharply, with the Sentix index plunging to -9.2 in September from -3.7 in August. Expectations were for an improvement to -2.2, underscoring rising pessimism across the bloc.
• Global Trade: China’s export slowdown deepened as US tariffs cut demand, raising alarms about global trade vulnerabilities. The weakness highlights how external shocks to China ripple through German exporters, given their heavy reliance on global supply chains.

Closing statement: The DAX is trading softer as weak trade data, investor pessimism, and tariff pressures weigh on sentiment. Unless US inflation data and ECB guidance shift the mood, the index risks stalling below 24,000 resistance in the near term.