Daily Analysis 10/02/2026

• GBP/USD Price: GBP/USD trades softer around 1.3675 during the European session, as domestic political and policy risks weigh on the pound.
• Political uncertainty: Prime Minister Keir Starmer faces mounting pressure after calls for his resignation linked to the Jeffrey Epstein fallout, adding a political risk premium to GBP.
• BoE policy: New forecasts show UK inflation could fall below the 2% target as early as April, reinforcing expectations of an imminent rate cut.
• Rate-cut expectations: BNP Paribas expects the next BoE cut in March, followed by a prolonged pause, with a terminal rate near 3.00% by mid-2027, limiting medium-term GBP appeal.
• US data: On the dollar side, US Retail Sales, the Employment Cost Index, and Fed speeches later today could drive near-term USD volatility.

Closing statement: GBP/USD remains tilted to the downside, pressured by rising UK political uncertainty and a clearly dovish Bank of England outlook. Unless US data disappoints meaningfully, the pair may remain vulnerable to further losses, with rallies likely to be sold as markets price in additional BoE easing.

• XAU/USD Price: Gold eases during the European session, ending a two-day rally, but downside remains contained as prices hold below yet close to the $5,000 psychological level.
• Risk sentiment: Reduced political uncertainty in Japan following the snap election and signs of easing Middle East tensions are supporting risk appetite, weighing on safe-haven demand.
• Fed independence: Trump’s remarks about potentially suing Fed chair nominee Kevin Warsh, alongside comments from Treasury Secretary Bessent, have revived fears of political pressure on the Fed, limiting gold’s downside.
• PBoC demand: The PBoC’s 15th consecutive month of gold purchases underlines persistent official-sector demand, providing a solid fundamental backstop.
• Key data: Focus turns to the January US Nonfarm Payrolls report, with markets expecting 70K job gains and an unemployment rate of 4.4%, a key catalyst for near-term price action.

Closing statement: Gold is consolidating after recent gains as risk sentiment improves, but structural support remains strong amid Fed credibility concerns and ongoing central bank buying. As long as prices stay above key support levels, dips are likely to attract buyers, with direction hinging on whether US labor data surprises to the downside.

• Crude Oil Price: WTI trades around $64.20, holding firm during early European hours as geopolitical risks continue to support prices.
• US-Iran diplomacy: Talks on Iran’s nuclear program ended with an agreement to continue diplomacy, slightly easing immediate escalation fears, though follow-up meetings keep uncertainty alive.
• Geopolitical risk: Despite diplomatic progress, US maritime warnings in the Strait of Hormuz and Iran’s threat to retaliate against US bases sustain supply-risk concerns.
• Venezuelan supply: Crude exports from Venezuela jumped to 800,000 bpd in January, adding fresh barrels to the market and partially offsetting geopolitical upside risks.
• Industry pressure: Shell’s declining oil reserves highlight longer-term supply challenges within the sector, reinforcing the need for new investment or consolidation.

Closing statement: WTI remains supported by geopolitical risk tied to Middle East tensions, keeping prices above the $64 mark. However, rising Venezuelan exports and ongoing diplomacy with Iran could cap further gains. In the near term, oil is likely to stay volatile and range-bound, with traders balancing supply risks against signs of improving global supply flows.

• DAX Price: The DAX is hovering around 25,020 points and is expected to initially struggle near the 25,000 psychological and technical barrier, a level that could cap near-term gains.
• German industry: Signs of an industrial turnaround are emerging as factory orders rose 7.8% m/m in December, marking the fourth consecutive monthly increase and fueling optimism for an economic recovery in the new year.
• Investor sentiment: Eurozone Sentix Investor Confidence jumped to 4.2 in February, well above expectations and the highest since July 2025, reinforcing the positive growth outlook.
• ECB dynamics: The early departure of Banque de France President François Villeroy, a known policy dove, could tilt the ECB Governing Council slightly toward a more hawkish stance over time.
• China inflation: Markets are also eyeing China’s January CPI and PPI, with inflation expected to cool due to base effects, which could influence global risk sentiment and European equities.

Closing statement: The DAX is testing a critical resistance zone near 25,000, supported by improving domestic data and stronger euro-area sentiment. While fundamentals point to a constructive medium-term outlook, near-term consolidation or a pullback cannot be ruled out unless the index decisively breaks above this level. Global data, particularly from China, may shape risk appetite in the sessions ahead.