Daily Analysis 02/07/2026

• GBP/USD Price: The GBP/USD pair is trading higher near the 1.3300 level during Thursday's European session. Sterling is benefiting from improved domestic political sentiment.
• Burnham's stance: Market sentiment toward the British Pound has improved after likely next Prime Minister Andy Burnham reaffirmed his commitment to maintaining fiscal discipline.
• BoE's Bailey: Bank of England Governor Andrew Bailey stated at the ECB Forum in Sintra that policymakers chose to leave interest rates unchanged at the July meeting because signs of economic softening are becoming more evident.
• Fed expectations: Markets continue to expect a relatively hawkish Federal Reserve under Chair Kevin Warsh, with investors anticipating that US interest rates could remain higher for longer.
• NFP data: The market's primary focus is now the June US Nonfarm Payrolls report, which will provide crucial insight into the strength of the labor market.

Closing statement: GBP/USD is finding support from improved confidence in the UK's fiscal outlook, but the broader direction remains heavily dependent on US monetary policy expectations. The June Nonfarm Payrolls report is likely to be the decisive catalyst for the pair, with labor market data expected to shape expectations for the Federal Reserve's next policy move.

• XAU/USD Price: Gold is extending its gains for a second consecutive session on Thursday, although prices remain confined within Wednesday's broader trading range.
• ADP data: The ADP Employment Report showed that US private-sector payrolls increased by 98,000 in June, below both the previous reading of 122,000 and market expectations of 113,000.
• Manufacturing activity: The ISM Manufacturing PMI declined to 53.3 in June from 54.0, indicating a slight moderation in factory activity. Meanwhile, the Prices Paid Index fell sharply from 82.1 to 73.0, signaling easing cost pressures, while the Employment Index improved slightly but remained below the expansion threshold, reflecting a manufacturing sector that continues to grow at a slower pace.
• Fed expectations: According to the CME FedWatch Tool, investors still assign approximately a 64% probability of a Federal Reserve rate hike in September and nearly an 85% chance of at least one increase before the end of the year.
• Fed's Warsh: Federal Reserve Chair Kevin Warsh reiterated that the central bank remains committed to its 2% inflation target and signaled that monetary policy will not be loosened prematurely despite political calls for rate cuts.

Closing statement: Gold is benefiting from softer US employment and manufacturing data, but the broader outlook remains constrained by persistent expectations of further Federal Reserve tightening. As long as markets continue to anticipate higher interest rates and the Fed maintains its commitment to fighting inflation, XAU/USD is likely to struggle to generate a sustained bullish breakout despite intermittent rebounds.

• Crude Oil Price: West Texas Intermediate (WTI) continues to trade around $68.00 per barrel during Thursday's European session.
• US-Iran talks: A fresh round of indirect negotiations between the United States and Iran in Qatar ended without meaningful progress toward a lasting peace agreement.
• Russia-Ukraine conflict: Russia launched another wave of missile and drone attacks on Kyiv, underscoring that geopolitical tensions remain elevated.
• OPEC+ production: Reuters reported that OPEC+ is preparing to raise its production quota by 188,000 barrels per day in August.
• Iranian oil: Floating crude storage off the Iranian coast has risen to an estimated 58 million barrels, with over 90% of those volumes reportedly lacking confirmed buyers or destinations.

Closing statement: WTI remains under pressure as expectations of higher OPEC+ production and growing Iranian crude inventories outweigh unresolved geopolitical tensions. Unless supply disruptions intensify or global demand improves materially, the near-term outlook for crude oil remains tilted to the downside, with oversupply concerns continuing to dominate market sentiment.

• DAX 40 Price: The DAX 40 is trading higher around 25,125 points during Thursday's European session.
• Rheinmetall contract: Defense company Rheinmetall announced that it has won a contract worth several hundred million euros to deliver four Skynex air defense systems to an undisclosed international customer.
• Bayer outlook: Bayer shares received a boost after the company revealed plans to separate its US glyphosate business into a standalone entity named Ruveon. Additional support came from a fresh 'Buy' recommendation by Deutsche Bank, with investors viewing the restructuring as a potential step toward reducing legal risks and unlocking shareholder value.
• Infineon production: Semiconductor manufacturer Infineon is set to bring a new production facility online in Dresden, effectively doubling its manufacturing capacity at the site.
• KNDS IPO: Franco-German defense group KNDS has postponed its planned stock market listing until market conditions become more favorable.

Closing statement: The DAX is benefiting from strong company-specific news, particularly in the defense, healthcare, and semiconductor sectors, which is helping lift the index despite a cautious broader market environment. Continued corporate investment and robust defense demand remain supportive factors, although investor sentiment will likely continue to be influenced by overall market conditions and macroeconomic developments.