Daily Analysis 13/01/2026

• GBP/USD Price: GBP/USD edges higher for the second consecutive session, attempting to extend Monday’s rebound from the 1.3390 area, a three-week low. The recovery remains tentative, suggesting cautious positioning rather than strong conviction.
• Policy Expectations: A dovish BoE outlook continues to cap upside potential for the Pound. Most analysts expect the BoE to hold rates steady in February, with the first 25 bp cut likely in March or April, keeping medium-term pressure on GBP against the USD.
• Labour Market: The latest REC–KPMG survey showed that labour demand stayed soft in December, reinforcing concerns about economic momentum. At the same time, wage growth accelerated, highlighting a tension between weakening employment conditions and persistent cost pressures.
• UK GDP: Markets are now focused on November UK monthly GDP, due Thursday. The economy is expected to be flat after a 0.1% contraction in October, and another weak reading could revive downside pressure on the Pound.
• Consumer Spending: UK consumers cut back sharply on spending in December, reflecting growing caution amid concerns over taxes, inflation and the broader economic outlook. This reinforces the narrative of subdued domestic demand heading into 2026.

Closing statement: GBP/USD is showing short-term corrective strength, but the broader outlook remains fragile amid a soft UK growth backdrop and expectations of BoE easing later this year. Sustained gains are likely to be capped near 1.3500–1.3550, while weak UK data could pull the pair back toward 1.3400 and 1.3300 support. Direction will hinge on upcoming GDP data and shifts in rate-cut expectations on both sides of the Atlantic.

• XAU/USD Price: Gold is consolidating below its all-time high and the $4,600 psychological level during the European session on Tuesday. The pause suggests a period of digestion after the recent strong rally rather than a clear trend reversal.
• Geopolitical Risk: Geopolitical tensions remain elevated after President Trump said he is considering a range of responses, including potential military action, against Iran following its crackdown on mass anti-government protests. Additionally, Trump announced an immediate 25% tariff on any country doing business with Iran, significantly raising global political risk and supporting safe-haven demand for gold.
• Policy Signal: New York Fed President John Williams stated there is no urgency to adjust interest rates, emphasizing that current policy is well positioned. His comments reinforce expectations for a prolonged Fed pause, which helps cap US yields and limits downside pressure on non-yielding assets like gold.
• US CPI: Ahead of today’s US CPI release, TD Securities expects core inflation to peak near 3% in Q2 2026, followed by gradual disinflation in the second half of the year, with core CPI ending 2026 around 2.6%. This outlook supports the case for stable-to-lower real yields over time, a medium-term bullish factor for gold.
• Trade Uncertainty: The threat of secondary tariffs on Iran’s trading partners adds a new layer of uncertainty to global trade flows, increasing volatility expectations and reinforcing Gold’s role as a hedge against policy-driven shocks.

Closing statement: XAU/USD remains structurally bullish, with consolidation below $4,600 reflecting healthy profit-taking after record highs. As long as prices hold above $4,500–$4,480 support, the bias favors another attempt toward $4,600 and fresh all-time highs. A stronger-than-expected CPI print could trigger a deeper pullback toward $4,430–$4,400, while persistent geopolitical risks and a dovish Fed backdrop continue to underpin the medium-term upside.

• Crude Oil Price: WTI extends its rally for a fourth consecutive session, trading around $59.70/bbl, supported by persistent geopolitical risk and near-term supply concerns.
• Iran Risk: Iran, one of OPEC’s largest producers, is facing its biggest anti-government protests in years. President Trump’s comments about possible military action add a clear geopolitical risk premium, as any disruption could threaten Iranian exports.
• Russia–Ukraine: Fresh Russian attacks on Ukraine’s major cities keep energy markets on edge, reinforcing concerns about broader spillovers into regional energy infrastructure and logistics.
• Kazakhstan Supply: Output from Kazakhstan is under pressure due to weather disruptions, maintenance, and infrastructure damage, tightening supply at the margin.
• Venezuela Uncertainty: Exxon Mobil’s continued interest in assessing Venezuelan assets contrasts with Trump’s threat to bar the company, highlighting ongoing policy and access uncertainty around future Venezuelan supply.

Closing statement: WTI remains supported in the near term by geopolitical tensions and incremental supply risks, which justify prices holding near recent highs. However, upside may become more fragile if Iranian exports remain uninterrupted or if Venezuelan supply prospects improve. In the short term, WTI is biased to stay firm or probe higher toward the low $60s, while any easing in geopolitical tensions could trigger profit-taking and a pullback back toward the mid-$50s.

• DAX Price: The DAX trades around 25,400 points, holding above fresh all-time highs, signaling strong bullish momentum and sustained risk appetite.
• Trade dynamics: Germany’s exports fell in November (-0.8% y/y; -2.5% m/m), while imports rose sharply (+5.4% y/y), pointing to softer external demand but resilient domestic absorption.
• Industrial Recovery: Industrial production increased 0.8% m/m and y/y, marking a third consecutive monthly gain and reinforcing signs of a gradual manufacturing stabilization.
• Sentiment Improvement: ZEW investor sentiment jumped to 45.8, well above expectations, reflecting optimism about the outlook despite a slight deterioration in assessments of current conditions.
• Corporate Catalyst: Merck’s FDA acceptance of the pimicotinib application adds a positive single-stock catalyst and supports the healthcare sector’s contribution to index strength.

Closing statement: The DAX remains underpinned by improving sentiment, recovering industrial output, and supportive corporate news, allowing it to consolidate above record levels. Near term, the bias remains upward, with scope for further gains if momentum persists and global risk sentiment stays constructive. However, weaker export trends and stretched valuations suggest the risk of short-term consolidation or a shallow pullback before any renewed leg higher.