Daily Analysis 07/03/2025

• GBP/USD Price: The GBP/USD pair makes slight gains, trading around 1.2890 during European hours on Friday, recovering some ground after losses in the previous session. The pair remains influenced by shifting monetary policy expectations and US economic data.
• BoE’s Mann: Bank of England (BoE) Monetary Policy Committee member Catherine Mann stated on Thursday that gradual interest rate changes may no longer provide clear guidance to volatile financial markets. Her comments suggest potential uncertainty in the BoE’s future policy direction.
• Fed News: Analysts at MUFG Bank believe that expectations are rising for the Federal Reserve (Fed) to focus more on slowing economic growth rather than persistent inflation. This shift in policy outlook, driven by US tariffs, could weigh on the US Dollar.
• US Jobless Claims: The US Department of Labor reported that Initial Jobless Claims dropped to 221K for the week ending March 1, down from 242K in the previous week. This signals resilience in the labor market ahead of Friday’s key employment report.
• NFP Data: The US Nonfarm Payrolls (NFP) report, set for release on Friday, is expected to show a moderate rebound in job growth. Market forecasts predict net job additions rising to 160K in February, up from January’s 143K, which could influence the Fed’s policy outlook.

Closing statement: GBP/USD remains in a consolidative phase, with traders awaiting the US NFP report for clearer direction. A stronger jobs print could support the US Dollar, while weaker data may push the pair higher.

• XAU/USD Price: Gold prices remain consolidated around the $2,910 level on Friday, attracting buyers on an intraday dip to $2,891.27. The metal struggles for clear direction as investors weigh economic uncertainties and US trade policy developments.
• US Tariff Policy: Concerns persist over US government tariff plans. President Donald Trump initially imposed 25% tariffs on Canadian and Mexican imports on Tuesday but later delayed similar levies on automakers for one month. These shifts have contributed to market caution and safe-haven demand for gold.
• US Job Cuts: According to the Challenger Job Cuts report, US-based employers announced plans to cut 172,017 jobs in February—marking a 103% increase from January and the highest level for the month since 2009. This reflects rising corporate concerns over economic conditions.
• Fed’s Harker: Philadelphia Fed President Patrick Harker warned on Thursday of mounting threats to economic growth and inflation, though he acknowledged that the US economy remains on a growth path with low unemployment. His comments suggest a cautious approach to monetary policy.
• NFP Report: The US Nonfarm Payrolls (NFP) report, due Friday, is expected to show 160K job additions in February, with the Unemployment Rate forecast to hold steady at 4%. A weaker-than-expected report could boost gold prices by reinforcing expectations of a dovish Fed stance.

Closing statement: Gold remains in consolidation mode, with price movements hinging on upcoming US employment data. A disappointing NFP print could lift gold higher, while a strong report may pressure prices lower.

• WTI Oil Price: West Texas Intermediate (WTI), the US crude oil benchmark, trades around $66.70 in the early European session on Friday. Prices remain under pressure amid concerns over rising supply and economic uncertainties.
• Tariff Exemptions: US President Donald Trump issued an executive order on Thursday temporarily exempting Canadian and Mexican goods from the 25% tariffs imposed earlier this week under the USMCA agreement. This move provides short-term relief but leaves broader trade tensions unresolved.
• US Crude Stockpiles: Oil prices weakened further as US crude inventories posted a larger-than-expected build. The Energy Information Administration (EIA) reported that crude stockpiles rose by 3.614 million barrels for the week ending February 28, indicating weaker demand signals.
• OPEC+ Increase: The OPEC+ alliance, including Russia and other partners, reaffirmed plans to boost oil output starting in April. This decision follows renewed pressure from President Trump on OPEC and Saudi Arabia to take action to lower global oil prices.
• US Employment Data: Traders are eyeing the US Nonfarm Payrolls (NFP) report, Unemployment Rate, and Average Hourly Earnings data set for release on Friday. A weaker-than-expected jobs report could fuel concerns about slowing economic growth, potentially affecting crude oil demand expectations.

Closing statement: WTI remains under pressure as supply concerns and economic uncertainty weigh on sentiment. A weak NFP report could amplify demand concerns, while any surprises in trade developments may trigger price volatility.

• DAX Price: The DAX gained 1.47% on Thursday, building on Wednesday’s 3.38% surge to close at 23,420. The index briefly touched a record high of 23,476 before retracing slightly, reflecting strong bullish momentum.
• ECB Rate Cut: On March 6, the European Central Bank (ECB) cut interest rates by 25 basis points to 2.65%, as widely expected. However, ECB staff lowered their 2025 growth forecast to 0.9%, citing heightened trade uncertainty as a key risk.
• Factory Orders: German factory orders dropped 7.0% in January, reversing a 5.9% gain in December and significantly exceeding the market’s expected 2.8% decline. The weak data raises concerns over Germany’s industrial recovery.
• Today's Data: While Eurozone Q4 GDP data is set for release today, its impact on markets is expected to be limited. Investors remain more focused on tariff developments and fiscal policy shifts, particularly in response to US trade measures.
• US Recession Odds: Rising concerns over the US economy contributed to shifting market sentiment. The latest estimates from Kalshi show that US recession odds for 2025 have jumped to 39%, up from 17% in January, amid Trump’s unpredictable tariff decisions.

Closing statement: The DAX’s strong momentum remains intact despite economic headwinds. However, concerns over trade disruptions and global recession risks could introduce volatility. Investors will closely monitor US economic data and policy shifts for further market direction.