Daily Analysis 07/01/2026

• GBP/USD Price: GBP/USD edges higher for a second consecutive session, trading around the 1.3510 area during European hours on Wednesday.
• US Growth: S&P Global’s Chief Business Economist Chris Williamson noted that while US business activity continued to expand in December, signs are emerging that the resilience of the US economy may be starting to weaken after a period of robust growth.
• Fed Messaging: Fed Governor Stephen Miran struck a dovish tone, while Richmond Fed President Thomas Barkin leaned neutral-to-hawkish, acknowledging that monetary policy is now operating within neutral territory.
• Geopolitical Developments: US President Donald Trump confirmed that Venezuelan President Nicolás Maduro and his wife were captured and removed from the country. Bloomberg reports that Maduro pleaded not guilty on Monday to US narco-terrorism charges, setting up a high-stakes legal and geopolitical confrontation.
• Data Watch: Markets are focused on a busy US calendar, including ADP Employment Change, ISM Services PMI, JOLTS Job Openings, and further commentary from Fed officials for near-term direction.

Closing statement: Sterling is drawing modest support from softer US growth signals and mixed Fed rhetoric, though upside momentum may remain limited ahead of key US labor and services-sector data that could recalibrate rate expectations.

• XAU/USD Price: Gold struggles to extend the strong gains seen over the past two sessions and faces rejection near the $4,500 psychological level, retreating from a one-week high during the European session on Wednesday.
• Fed's Barkin: Richmond Fed President Thomas Barkin said future rate decisions must be “finely tuned,” highlighting competing risks to both inflation and the labor market. He reiterated that the policy rate is currently within neutral territory and emphasized close monitoring of the Fed’s dual mandate.
• Fed's Miran: Earlier, Fed Governor Stephen Miran adopted a dovish stance, stating that incoming data are likely to justify lower rates. Miran suggested that conditions could warrant as much as 100 basis points of rate cuts in 2026, keeping longer-term rate-cut expectations alive.
• Geopolitical Risk: Gold continues to draw underlying support from rising geopolitical tensions after US President Donald Trump signaled that Colombia and Mexico could face US military action as part of a broader campaign against criminal networks and regional instability.
• Data Watch: Traders look ahead to key US releases later on Wednesday, including the ADP employment report, ISM Services PMI, and JOLTS Job Openings, which could drive short-term volatility and shape near-term Fed rate expectations.

Closing statement: While profit-taking near the $4,500 handle is capping immediate upside, a dovish Fed bias and elevated geopolitical risks should continue to provide a supportive backdrop for gold on dips.

• Crude Oil Price: West Texas Intermediate (WTI) trades lower, dipping toward about $56.20 per barrel during late European hours on Wednesday as global supply concerns weigh on sentiment.
• Venezuela Oil: US President Donald Trump announced that Venezuela’s interim authorities will transfer 30–50 million barrels of sanctioned crude oil to the United States, to be sold at market prices with proceeds controlled by the US, in a dramatic shift in oil flows and diplomatic engagement.
• Geopolitical Moves: Trump’s administration continues to signal broader geopolitical ambitions, with public comments about pursuing Greenland and reducing regional instability, rhetoric that has market implications beyond energy alone.
• Diplomatic Tensions: China’s ban on exporting certain dual-use items to Japan has escalated a diplomatic dispute, illustrating rising geopolitical tensions in Asia that could spill over into commodity markets and broader risk sentiment.
• Security Cooperation: France, the UK, and Ukraine signed a declaration of intent on the future deployment of multinational forces in Ukraine, reinforcing the ongoing geopolitical risk backdrop that often supports crude oil’s safe-haven premium.

Closing statement: Crude oil remains under pressure from expectations of greater Venezuelan supply and soft global demand cues, while geopolitical developments continue to underpin volatility. Near-term direction is likely to hinge on market interpretation of evolving supply flows and risk sentiment.

• DAX Price: The DAX extends recent gains and is trading around 25000 points, pushing toward fresh record territory after rebounding from key support levels.
• Inflation Data: Germany’s inflation data showed a notable downward surprise in December. Preliminary figures indicate the CPI fell to 1.8% y/y from 2.3%, while HICP inflation eased to around 2.0% y/y, softer than expected and below prior readings.
• Retail Sales: German Retail Sales climbed 1.1% YoY in November, beating October’s gain and suggesting that consumer spending retains some resilience despite softening price pressures.
• Eurozone Activity: The broader euro area ended the year on stable footing, with the Q4 average Composite PMI significantly higher than Q3, indicating continued moderate growth and supporting the ECB’s view that the economy is in a “good place.”
• Geopolitical News: Ukraine’s President Volodymyr Zelenskiy held concrete discussions with US counterparts on ceasefire monitoring and security guarantees, with the Ukrainian delegation staying in Paris for further talks, developments that keep geopolitical risk premiums alive in European markets.

Closing statement: The DAX remains on a bullish trajectory, supported by softer inflation data and resilient domestic demand. However, ongoing geopolitical developments and upcoming macro releases will likely influence near-term direction as investors balance risk appetite with economic uncertainty.