Daily Analysis 10/07/2026

• GBP/USD Price: The GBP/USD pair maintains moderate gains during Friday's European session, although it remains below the 1.3450 level.
• UK PM: Andy Burnham appears increasingly likely to become the UK's next Prime Minister after securing overwhelming support in the Labour Party leadership contest. According to Bloomberg, 322 out of 403 Labour MPs formally nominated Burnham to succeed Keir Starmer, strengthening expectations of a smooth leadership transition.
• BoE's Pill: Bank of England Chief Economist Huw Pill, who has consistently taken a more hawkish stance, stated that interest rates may need to rise over the coming year.
• Fed's Williams: Federal Reserve President John Williams said the latest Fed minutes reflected a shared policy approach among policymakers. He also noted that monetary policy may need to respond if the economic effects of artificial intelligence (AI) become more persistent, while adding that stablecoins are unlikely to replace traditional money market funds in the near future.
• US data: US economic releases delivered mixed signals. Existing Home Sales came in at 4.09 million, below the expected 4.20 million, indicating continued weakness in the housing market. Meanwhile, Initial Jobless Claims of 215,000 slightly beat expectations, while Continuing Claims matched forecasts, suggesting the US labor market remains relatively resilient.

Closing statement: GBP/USD remains supported by expectations of continued Bank of England policy tightening and growing political clarity in the UK. However, Federal Reserve policy expectations and mixed US economic data are likely to remain the key drivers of the pair in the near term.

• XAU/USD Price: Gold rebounded from the $4,109–$4,108 area during Friday's European session, reversing a modest Asian decline.
• Fed's Logan: Federal Reserve Bank of Dallas President Lorie Logan refrained from commenting on the monetary policy outlook but emphasized the importance of ensuring that strong financial markets maintain an appropriate balance in the use of leverage.
• US-Mexico trade: US Trade Representative Jamieson Greer stated that President Donald Trump wants to reduce the US trade deficit with Mexico and confirmed that discussions with Mexican officials are ongoing.
• Fed's Perli: New York Fed official Roberto Perli said the central bank is prepared to implement any balance sheet changes directed by the Federal Open Market Committee (FOMC).
• Ukraine conflict: Reports suggest that Russian President Vladimir Putin is prepared to intensify the war in Ukraine over the coming months and remains unwilling to engage in peace negotiations while Ukrainian attacks on Russian territory continue.

Closing statement: Gold is stabilizing after recovering from intraday losses, supported by ongoing geopolitical uncertainty. However, expectations of a restrictive Federal Reserve and limited conviction among buyers continue to cap upside potential, leaving the precious metal sensitive to both policy developments and global risk sentiment.

• Crude Oil Price: West Texas Intermediate (WTI) is trading around $71.35 during Friday's European session, stabilizing after Thursday's sharp losses.
• Iran oil: According to TankerTrackers.com, Iran exported around 10 million barrels of crude oil and fuel oil overnight amid expectations that the US Navy could soon reimpose a blockade. The surge in exports suggests Tehran is attempting to maximize shipments before any potential tightening of restrictions on maritime trade.
• Market tensions: Market sentiment improved after President Donald Trump stated that Iran had approached the US seeking a deal to prevent further escalation in the Middle East. A White House official also reaffirmed that Washington remains committed to the existing memorandum of understanding with Iran, reducing immediate concerns over a broader regional conflict and limiting upward pressure on oil prices.
• Crude inventories: The latest inventory data showed US commercial crude oil stocks increased by 2.998 million barrels, well above market expectations.
• Iraq-Turkey pipeline: Turkey and Iraq are expected to sign a 12-month extension of the agreement governing the Iraq–Turkey crude oil pipeline, preventing its scheduled expiration on July 27.

Closing statement: WTI is consolidating as easing geopolitical tensions offset concerns over rising supply. Stronger US crude inventories, increased Iranian exports, and the expected extension of the Iraq-Turkey pipeline agreement are helping to limit price gains, while developments in US-Iran relations remain the key driver for oil markets.

• DAX 40 Price: The DAX 40 is trading higher around the 25,160-point mark on Friday, recovering some of the losses recorded earlier in the week.
• German inflation: Germany's final Harmonized Index of Consumer Prices (HICP) confirmed that annual inflation slowed to 2.4% in June, down from 2.7% in May and 2.9% in April.
• Bayer investment: Asset manager Apollo has agreed to acquire a minority stake in Bayer's long-acting reversible contraceptives business for €3 billion.
• Auto industry: Representatives of the German automotive sector warned that European employment could come under significant pressure unless manufacturers and workers adapt to intensifying competition from Chinese and other global rivals.
• Sales figures: Market participants are closely watching upcoming sales reports from BMW and Volkswagen. In particular, investors will analyze Volkswagen's figures for indications of how extensive the company's planned cost-cutting program may need to be, following announcements of further restructuring and efficiency measures.

Closing statement: The DAX 40 is recovering as easing German inflation improves market sentiment. However, concerns over the competitiveness of Germany's automotive sector and upcoming corporate results from major carmakers are likely to remain the main drivers of the index in the near term.