Daily Analysis 15/08/2025

• GBP/USD Price: The pair trades near 1.3545 in early European hours Friday, supported by a softer US dollar.
• UK GDP: Q2 GDP rose 0.3% QoQ, slowing from 0.7% in Q1, according to the ONS. Despite the slowdown, the figure lent some support to sterling.
• US Business Sentiment: Fed’s Barkin noted that while business sentiment has improved in some areas, hiring momentum remains weak.
• Powell's Speech: Markets await remarks from Fed Chair Powell on August 22, with the Jackson Hole Economic Policy Symposium set for August 21–23.
• US Retail Sales: Friday’s US retail sales data could influence expectations for the Fed’s interest rate path.

Closing statement: Sterling’s gains hinge on ongoing USD weakness and steady UK growth, but US data and Fed commentary remain potential catalysts for volatility.

• XAU/USD Price: XAU/USD trades near $3,341 per ounce on Friday, hovering at weekly lows amid persistent selling pressure.
• US Producer Prices: July PPI surged 0.9% MoM—the largest gain since June 2022—lifting the annual rate to 3.3% and exceeding expectations of 2.5%.
• Fed's Musalem: Musalem sees most tariff-driven inflation fading within 6–9 months, though the effect could linger longer in some sectors.
• Treasury Secretary: Scott Bessent suggested rates should be 150–175 bps lower, advocating for a 50 bps cut in September due to easing inflation and weaker jobs data.
• Fed’s Goolsbee: Fed’s Goolsbee called tariffs a “stagflationary shock” and emphasized that upcoming Fed meetings remain “live” for policy moves.

Closing statement: Gold’s weakness reflects stronger US inflation data and cautious Fed rhetoric, with monetary policy expectations likely to dictate short-term direction.

• Crude Oil Price: West Texas Intermediate (WTI) crude trades at $62.60 per barrel on Friday, down from Thursday’s $63.08 close.
• Geopolitical Risks: Markets remain tense before Friday’s US–Russia meeting in Alaska, as President Trump warned of “very severe” consequences if Russia fails to end the Ukraine war.
• Crude Inventory: EIA data showed US crude stocks rising by 3.036M barrels for the week ending August 8, defying expectations after a 3.029M barrel draw in the prior week.
• China Car Subsidies: Reports indicate China suspended some car trade-in subsidies in several regions, while scrap renewal incentives remain active; the scale of the suspension is unclear.
• Trump News: From the Oval Office, Trump declared inflation “hardly any at all,” calling it a “perfect number.”

Closing statement: WTI weakness reflects a mix of inventory oversupply, geopolitical tension, and uncertain demand signals, with traders eyeing developments from the US–Russia talks for potential price direction.

• DAX Price: Germany’s DAX index rose 0.79% on Thursday to 24,378, adding to Wednesday’s 0.67% advance.
• German Jobs: Federal Statistical Office data showed manufacturing employment (excluding construction) fell by 141,000 jobs (-1.7% YoY) in Q2, underscoring ongoing industrial weakness.
• Defense Stocks: Rheinmetall jumped 2.76%, while Airbus and MTU Aero gained 2.31% and 2.07%, respectively, on renewed expectations for higher defense spending despite prior pressure from peace hopes in the Russia–Ukraine conflict.
• Insurer Stocks: Hannover Re and Munich Re declined 0.85% and 0.61% after reporting disappointing quarterly results.
• US Data: Friday’s US retail sales release (expected +0.5% MoM in July) could sway Federal Reserve policy expectations following June’s +0.6% reading.

Closing statement: The DAX’s advance was fueled by defense sector gains offsetting insurance sector weakness, with investors awaiting US economic data for further market direction cues.