Daily Analysis 12/09/2025

• GBP/USD Price: GBP/USD trades weak at 1.3550 in Friday’s European session, extending its downside bias after recent softness in UK economic data.
• UK Data: UK GDP stalled at 0% in July, following a 0.4% rebound in June, signaling that momentum in the economy has faded. This flat reading reflects persistent weakness in domestic activity.
• Industrial Output: Monthly Industrial Production fell 0.9% and Manufacturing Production dropped 1.3% in July, both well below expectations. The figures highlight ongoing strain in the UK’s industrial sector.
• BoE Outlook: Markets now shift focus to the BoE policy meeting on September 18, one day after the Fed. The BoE is expected to keep the Bank Rate steady at 4.00%, after already delivering five cuts earlier in 2025.
• US Labor Data: In the US, Initial Jobless Claims jumped to 267K, well above consensus (235K) and prior levels (237K). The rise reinforces concerns about cooling labor conditions.

Closing statement: GBP/USD stays under pressure near 1.3550 as stagnant UK growth and weak output data weigh on sentiment. With the BoE set to hold rates steady and US labor market softness emerging, the pair faces a tug-of-war between domestic weakness and external USD drivers.

• XAU/USD Price: Gold (XAU/USD) rebounds on Friday, retesting the $3,650 barrier after reversing Thursday’s decline, as demand strengthens ahead of key US data.
• Inflation Data: The US CPI rose 0.4% MoM in August, lifting annual inflation to 2.9% from 2.7%. While inflation edged higher, markets focus on policy easing expectations rather than tightening risks.
• Fed Policy: Markets have now fully priced in three Fed rate cuts for 2025. According to CME FedWatch, traders see a 100% chance of a 25bps cut next week, with additional cuts expected in October and December.
• China Growth: China’s Q3 GDP is projected below 5%, signaling renewed slowdown pressure. Weak growth momentum could push Beijing toward further stimulus measures into year-end.
• Consumer Sentiment: Attention turns to the preliminary Michigan Consumer Sentiment report, which could influence Fed expectations as markets weigh inflation, growth, and consumer demand signals.

Closing statement: Gold strengthens near $3,650 as firm Fed rate cut bets and China slowdown risks boost safe-haven demand. With markets looking past slightly higher US inflation and awaiting sentiment data, XAU/USD bias tilts bullish in the short term.

• Crude Oil Price: West Texas Intermediate (WTI) crude slips early Friday, trading near $61.55 per barrel, down from Thursday’s close of $62.02, as supply concerns weigh on sentiment.
• Supply Outlook: The IEA’s monthly report flagged a faster-than-expected rise in global oil supply this year, driven by OPEC+ output increases, adding pressure to crude prices.
• Trade Policy: According to the Financial Times, the US Trump administration plans to push G7 allies to impose steep tariffs on India and China for continuing Russian oil imports, aiming to tighten pressure on Moscow.
• Japan’s Sanctions: Japan’s Trade Ministry announced new export restrictions against foreign entities tied to Russia, underscoring Tokyo’s alignment with Western sanctions efforts.
• Geopolitical Tensions: Poland intercepted Russian drones crossing its airspace after missions in Ukraine — marking the first direct NATO shots fired in the conflict, raising risks of further escalation.

Closing statement: WTI crude hovers near $61.55 as rising supply forecasts and geopolitical escalation weigh on prices. Market focus stays on sanctions developments and NATO’s involvement, both of which could drive volatility in oil.

• DAX Price: The DAX trades slightly lower, down 0.1% at 23,738 points, hovering near its 100-day moving average at 23,834, which is acting as a resistance level.
• Inflation Data: Germany’s August final CPI was confirmed at +2.2% YoY, while core inflation stood at 2.7%, reinforcing expectations that the ECB will hold policy steady for now.
• Monetary Policy: JP Morgan shifted its forecast, now expecting the ECB’s next rate cut in December instead of October, reflecting a slower pace of monetary easing.
• ECB Policymaker: ECB’s Šimkus warned that inflation risks remain elevated, noting that while inflation has stabilized near target, vigilance is still necessary.
• EU Trade: EU officials signaled they are unlikely to impose tariffs on India or China, despite US pressure, citing concerns over overly broad measures and preferring targeted sanctions on specific entities.

Closing statement: The DAX holds near 23,738, capped by its 100-day average, with investors weighing stubborn inflation, a delayed ECB rate cut outlook, and EU resistance to US tariff pressure. Monetary policy signals and trade stances remain key drivers.