Daily Analysis 21/07/2026

• GBP/USD Price: The GBP/USD pair has recovered ground and is testing the 1.3450 level during Tuesday's early European session.
• UK's Burnham: New UK Prime Minister Andy Burnham again stated that his government will adhere to the fiscal rules established by the previous cabinet.
• Chancellor appointment: The unexpected appointment of former UK Defence Minister John Healey as Chancellor surprised financial markets, which had strongly anticipated Shabana Mahmood for the position.
• Unemployment rate: The UK ILO unemployment rate held steady at 4.9% in the three months to May, slightly below expectations for an increase to 5.0%.
• Jobless claims: The number of unemployment claimants increased by only 6.7K, significantly below the market forecast of 28.3K. In addition, April's figure was revised sharply lower to 1.3K from the previous estimate of 31.2K, providing further evidence of a stronger-than-expected labour market.

Closing statement: GBP/USD is attempting to recover toward 1.3450, supported by stronger UK labour market data. However, uncertainty surrounding the new government's fiscal flexibility and the surprise Chancellor appointment continues to weigh on the Pound and could limit further gains.

• XAU/USD Price: Gold continues to recover from the two-week low near $4,024 recorded last Friday, advancing for a third consecutive session on Tuesday.
• Chinese AI: The White House issued an executive order indicating that US companies may host Chinese AI models if they can guarantee data security and accept liability in the event of a breach.
• Secretary of State: Despite continued exchanges of strikes between the US and Iran, US Secretary of State Marco Rubio said Washington remains open to negotiations.
• Market expectations: According to the CME FedWatch Tool, traders are pricing in an approximately 83% probability that the Federal Reserve will raise interest rates by the end of the year.
• Chinese equities: Two Chinese state investment firms reportedly purchased nearly $9 billion in stocks over the weekend after concerns about rising AI spending triggered a market selloff.

Closing statement: Gold remains supported by its ongoing recovery and persistent geopolitical uncertainty, but further gains could be limited by expectations for higher US interest rates and a potentially stronger Dollar. The market will continue to monitor developments in US-Iran diplomacy, Fed policy expectations, and global risk sentiment.

• Crude Oil Price: West Texas Intermediate (WTI) is trading around $82.00 per barrel during Tuesday's early European session.
• Nuclear tensions: The Wall Street Journal reported that Israeli intelligence believes Iran moved thousands of centrifuges into underground tunnels at Pickaxe Mountain last autumn. Reports that President Trump has threatened to target the site, amid Israeli calls for renewed strikes on Iran's nuclear program, increase the risk of further escalation in the region.
• Houthi threats: Yemen-based Houthi forces announced a “sea-navigation ban” affecting Saudi Arabia in the Red Sea. The Saudi-led coalition in Yemen has warned that it will respond with force to threats against commercial vessels in the Bab el-Mandeb Strait, raising concerns over shipping security and potential disruptions to energy flows.
• Drone attack: A drone reportedly struck a tanker loading crude oil at the Caspian Pipeline Consortium (CPC) export terminal on the Black Sea, forcing exports to be suspended for the second time in less than 24 hours.
• API inventory: Traders are awaiting the American Petroleum Institute (API) weekly crude oil inventory report, due later Tuesday. A larger-than-expected drawdown in US inventories could provide additional support for oil prices, while an unexpected build could limit the recent rally.

Closing statement: WTI remains supported around $82.00 as escalating geopolitical risks threaten key oil infrastructure and shipping routes. The upcoming API inventory data could provide the next short-term catalyst for crude oil prices.

• DAX 40 Price: The DAX 40 is trading around 24,870 points on Monday, maintaining a positive tone as investors assess fresh German economic data and developments involving major companies and financial institutions.
• Producer prices: Germany's Producer Price Index (PPI) excluding construction declined by 0.3% in June after three consecutive monthly increases. However, underlying momentum remains notable, with producer prices rising at an annualized pace of 4.8% over the latest three months, suggesting that price pressures may still be building.
• Mercedes news: Mercedes-Benz is reportedly pushing for amendments to draft legislation that would increase the permitted threshold for Chinese ownership to 25%.
• Merz critique: German Chancellor Friedrich Merz criticized what he views as the undervaluation of the Chinese renminbi, arguing that the EU cannot compete effectively against a country that artificially manages its currency.
• UniCredit-Commerzbank: German officials are reportedly preparing conditions for potential future discussions with UniCredit regarding Commerzbank. The development suggests that Berlin may be moving away from outright resistance to the takeover and toward attempting to influence the terms and eventual outcome of any potential transaction.

Closing statement: The DAX 40 remains supported despite mixed signals from German producer prices. Investors will continue to monitor developments surrounding China's economic relationship with Germany, corporate ownership rules, and the potential UniCredit–Commerzbank transaction for further market direction.