Daily Analysis 11/05/2026

• GBP/USD Price: GBP/USD struggled to build on its modest rebound during Monday’s Asian session and remained below the 1.3600 level. Renewed US Dollar demand limited the pair’s recovery momentum.
• Election results: The UK local election results delivered a major setback for the ruling Labour Party, marking its worst municipal losses for a governing party since 1995. Pressure has increased on Keir Starmer, although he confirmed he has no intention of resigning.
• BoE policy: The Bank of England signaled that further interest rate hikes could still be appropriate if inflation remains persistent. Combined with easing concerns over political instability in the UK, the central bank’s stance is helping provide support for the British Pound.
• Trump-Xi Meeting: According to US officials, Donald Trump is expected to arrive in Beijing on Wednesday for talks with Chinese President Xi Jinping. Discussions are expected to include the Iran conflict and broader geopolitical developments, which could influence market risk sentiment.
• Labor market: The US Bureau of Labor Statistics reported that Nonfarm Payrolls increased by 115K in April. Although lower than March’s 185K reading, the result still exceeded market expectations of 62K, highlighting continued resilience in the US labor market.

Closing statement: GBP/USD remains caught between hawkish Bank of England expectations and renewed US Dollar strength supported by solid US labor data. The near-term outlook is mixed, with political developments in the UK and upcoming geopolitical events likely to drive volatility.

• XAU/USD Price: Gold opened the new week on a softer footing and remained below the $4,700 level as renewed US Dollar buying limited demand for the precious metal. The stronger Dollar continues to weigh on short-term bullish momentum.
• Iran signals: Iran reportedly responded to Donald Trump’s proposal by emphasizing the need to end the conflict across multiple fronts, especially in Lebanon, while also addressing security around the Strait of Hormuz. Markets continue to monitor whether diplomatic efforts can ease geopolitical risks.
• Consumer sentiment: The preliminary University of Michigan Consumer Sentiment Index fell to 48.2 in May, below expectations and lower than the previous reading. However, inflation expectations eased slightly across both one-year and five-year horizons, which may reduce pressure for more aggressive Federal Reserve tightening.
• China inflation: China reported stronger-than-expected inflation figures in April, with Producer Price Index (PPI) rising 2.8% year-over-year and Consumer Price Index (CPI) increasing 1.2%. Higher energy prices and increased demand for gold jewellery contributed to the stronger inflation readings.
• US Asian meetings: US Treasury Secretary Bessent confirmed upcoming visits to Japan and South Korea for meetings with regional leaders, including discussions with Chinese Vice Premier He Lifeng. Investors will closely monitor the talks for signals regarding trade relations and geopolitical stability.

Closing statement: Gold remains pressured by a firmer US Dollar, though geopolitical uncertainty and elevated global inflation continue to provide underlying support. The near-term outlook is mixed, with market focus shifting toward diplomatic developments and future Federal Reserve expectations.

• Crude Oil Price: West Texas Intermediate crude oil climbed toward the $96.00 level during early Asian trading on Monday. Prices remain elevated as traders continue to price in geopolitical risk and persistent supply concerns.
• Oil shipments: According to Reuters, three supertankers carrying Iraqi and Emirati crude successfully passed through the Strait of Hormuz after reportedly disabling their transponders to avoid detection. The movement highlights ongoing efforts by producers to maintain exports despite heightened regional tensions.
• China's imports: China’s April trade data showed crude oil imports falling significantly to 38.5 million tonnes from 50 million tonnes in March. The weaker import figures suggest softer Chinese demand or increased reliance on domestic inventories amid volatile market conditions.
• Ukrainian attacks: Ukraine intensified strikes on Russian oil facilities during April, targeting infrastructure well beyond frontline areas. Analysts believe the attacks are increasing operational and economic pressure on Russia while forcing the redistribution of air defense resources.
• US supply: US oil producers remain cautious about significantly increasing drilling activity due to price volatility, investor discipline, and long project timelines. In addition, refinery limitations and shale oil quality differences make it difficult for the United States to fully compensate for disrupted Middle Eastern oil supplies.

Closing statement: Crude oil prices remain strongly supported by geopolitical tensions, supply disruptions, and structural limitations in global production capacity. While weaker Chinese import data may cap some upside, the overall near-term outlook remains bullish as markets continue to monitor developments around the Strait of Hormuz and global supply chains.

• DAX 40 Price: The DAX 40 is expected to show little movement on Monday following the previous session’s 1.3% decline, which left the index closing at 24,338.63 points. Currently, it is trading around 24290 points.
• ECB stance: Luis de Guindos emphasized the need for prudence regarding interest rate decisions as Eurozone growth weakens. His comments reinforce expectations that the European Central Bank may proceed carefully with further monetary tightening.
• Germany strategy: According to the Financial Times, Germany is making a renewed effort to acquire Tomahawk missiles following tensions with Donald Trump. The development highlights Europe’s growing focus on defense and military preparedness.
• GEA Group: GEA Group AG reported first-quarter order intake and operating profit above analyst expectations, although earnings per share missed forecasts due to sharply lower free cash flow. Despite mixed results, the company maintained its full-year outlook.
• Corporate earnings: Investors are closely monitoring upcoming financial reports from major German companies, including GEA Group AG and Hannover Re . Corporate guidance and earnings performance are expected to play a key role in shaping near-term market sentiment.

Closing statement: The DAX 40 remains under pressure following recent losses, with weak growth concerns and geopolitical developments weighing on investor confidence. However, ongoing earnings releases may provide selective support if corporate results continue to outperform expectations.