Daily Analysis 08/07/2026

• GBP/USD Price: The GBP/USD pair is trading almost unchanged near 1.3355 during Wednesday's European session.
• UK politics: Reform UK leader Nigel Farage announced that he will resign as a Member of Parliament, triggering a by-election in which he intends to run again. Farage denied any wrongdoing regarding allegations of misuse of public funds and accused the political establishment of targeting him, adding another layer of uncertainty to the UK's political landscape.
• BoE outlook: In its bi-annual Financial Stability Report, the Bank of England (BoE) warned that vulnerabilities have increased due to geopolitical tensions in the Middle East and the rapid expansion of AI-related lending.
• Middle East: Reports indicate that recent US airstrikes on Iran followed Iranian attacks on commercial vessels in the Strait of Hormuz, including a Qatari LNG carrier and a Saudi oil tanker.
• Iran's stance: Iranian Parliament Speaker Mohammad Bagher Ghalibaf stated that Iran would not yield to external pressure, declaring that the era of "bullying and extortion" has ended.

Closing statement: GBP/USD remains largely range-bound as supportive UK fundamentals are offset by heightened geopolitical uncertainty and stronger demand for safe-haven assets. Political developments in the UK, alongside ongoing tensions in the Middle East and expectations for central bank policy, are likely to remain the key drivers of the pair in the near term.

• XAU/USD Price: Gold is trading with a positive bias during Wednesday's European session, recovering after two consecutive days of losses that pushed prices below the $4,100 level.
• AI industry: Nvidia announced a partnership with AI chip startup d-Matrix, signaling its intention to expand beyond semiconductor hardware into the AI model ecosystem.
• China AI: Reports indicate that Chinese authorities have held discussions with major technology companies about restricting overseas access to China's most advanced AI models, including future releases.
• Fed rate: According to the CME FedWatch Tool, investors are pricing in more than an 80% probability that the Federal Reserve will deliver at least one 25-basis-point rate hike before the end of the year.
• Meeting minutes: Market participants are closely awaiting the release of the Federal Reserve's June meeting minutes later in the day.

Closing statement: Gold has stabilized after recent losses, but its near-term outlook remains closely tied to expectations for US monetary policy. With markets still anticipating additional Federal Reserve tightening, the release of the Fed's meeting minutes will likely determine whether gold can extend its recovery or resumes its broader downward trend.

• Crude Oil Price: West Texas Intermediate (WTI) is holding above $72.00 per barrel, remaining close to a two-week high.
• US-Iran tensions: Following recent Iranian attacks, the US Treasury revoked its June 21 waiver permitting sales of Iranian oil, and the United States subsequently carried out strikes on Iranian ports, IRGC air defense facilities, and dozens of fast attack boats. Iran responded with missile and drone attacks targeting Bahrain and Kuwait.
• Saudi Arabia: Saudi Arabia reduced its August official selling price (OSP) for crude exports to Asia by a record $11 per barrel.
• Crude inventories: The latest American Petroleum Institute (API) data showed US crude oil inventories declined by 399,000 barrels, a smaller draw than the market expectation of 1.5 million barrels.
• China's fuel: China has reportedly lifted restrictions on refined fuel exports, allowing state-owned refiners and one private refiner to resume overseas shipments.

Closing statement: WTI remains supported by renewed geopolitical tensions between the US and Iran, keeping prices above the $72 level. However, increased supply from Saudi Arabia, weaker-than-expected US inventory draws, and the resumption of Chinese fuel exports are limiting further upside, leaving the market balanced between geopolitical risk and improving supply fundamentals.

• DAX 40 Price: The DAX 40 is trading lower around the 25,150-point mark after retreating sharply over the past two sessions.
• Rheinmetall plan: Defense contractor Rheinmetall has suspended plans to create 1,000 new jobs in its naval shipbuilding division after Germany cancelled the F126 frigate program last month.
• E.ON's regulation: The UK's competition regulator has launched an initial review of E.ON's proposed acquisition of Ovo Energy, inviting stakeholders to comment on its potential impact on market competition.
• UBS outlook: UBS raised its price target for RWE to €66 from €65 while maintaining a "Buy" recommendation.
• Defense spending: Germany has established an additional special fund for the Bundeswehr and plans to gradually raise defense spending to 3.5% of GDP by 2029, before reaching the new NATO target of 5% of GDP by 2035.

Closing statement: The DAX is experiencing a healthy pullback after recent record highs, but the broader outlook remains supported by strong fiscal spending plans and positive long-term prospects for key sectors such as defense and energy. Investors will continue to monitor corporate earnings, ECB policy expectations, and geopolitical developments for the next direction in German equities.