Daily Analysis 16/07/2026

• GBP/USD Price: The GBP/USD pair trades slightly lower around 1.3531, giving up some ground following the latest UK economic data.
• UK economy: Data from the Office for National Statistics (ONS) showed that the UK economy grew by 0.1% month-on-month in May, recovering from a 0.1% contraction in April. The reading matched market expectations, suggesting the economy is stabilizing but continues to expand at a modest pace.
• Industrial data: UK Industrial Production fell 0.5% in May, significantly weaker than expected and reversing April's 0.2% increase, pointing to softness in the broader industrial sector. In contrast, Manufacturing Production rose 0.1%, outperforming expectations for a decline, indicating that manufacturing activity has remained relatively resilient despite wider industrial weakness.
• Fiscal policy: The Pound found support after reports that incoming Prime Minister Andy Burnham is expected to appoint Shabana Mahmood as Finance Minister. Financial markets view Mahmood as a fiscally conservative policymaker, easing concerns about looser government spending and providing additional support for Sterling.
• Beige Book: The Federal Reserve's Beige Book indicated that economic activity expanded at a slight to modest pace in eleven of the twelve Fed districts, while one district reported unchanged conditions.

Closing statement: GBP/USD remains relatively stable as modest UK economic growth and expectations of fiscally conservative leadership provide support for the Pound. However, weaker industrial output and the resilient US economy are likely to keep the pair sensitive to upcoming economic data and central bank developments.

• XAU/USD Price: Gold (XAU/USD) remains under pressure during Wednesday's European session, trading near $4,025 and down around 0.85% on the day.
• Middle East: The geopolitical backdrop continues to support safe-haven demand, with Iran maintaining attacks on what it says are US military bases in the region, while the United States continues strikes on Iranian military targets. Reports that further escalation, including potential action involving Kharg Island, remains under consideration are keeping geopolitical risks elevated.
• Fed's Williams: New York Fed President John Williams stated that restoring inflation to the Fed's 2% target remains a priority, while acknowledging there are encouraging signs that inflation may have already peaked and could gradually ease in the coming quarters.
• Nvidia news: Nvidia CEO Jensen Huang announced several new partnerships with leading Japanese companies and the government focused on Physical AI and Sovereign AI initiatives. The collaborations with firms including SoftBank, Hitachi, Fujitsu, and Mitsubishi Heavy highlight continued global investment in artificial intelligence, supporting broader technology sector optimism.
• China's data: Following the latest Chinese economic data, indicators such as Aggregate Financing and New Yuan Loans remained weak, suggesting credit demand continues to soften.

Closing statement: Gold remains under modest selling pressure as markets weigh persistent geopolitical tensions against the Federal Reserve's commitment to containing inflation. Investors will continue monitoring developments in the Middle East and expectations for US monetary policy, while weaker Chinese credit data adds another layer of uncertainty to the global economic outlook.

• Crude Oil Price: West Texas Intermediate (WTI) crude continues its pullback for the third consecutive session, trading around $79.00 per barrel during Thursday's European session.
• US-Iran: Tensions in the Middle East intensified after US forces launched another round of airstrikes on Iranian missile and drone infrastructure on Wednesday.
• IEA warning: International Energy Agency (IEA) Executive Director Fatih Birol said oil markets remain nervous about the renewed conflict involving Iran. He warned that continued disruption to tanker traffic through the Strait of Hormuz could begin to have broader economic consequences within weeks if tensions persist.
• Russian export: Around 135 million barrels of Russian crude oil are reportedly stranded at sea following Ukraine's campaign targeting Russian refining infrastructure. The growing offshore backlog is forcing Moscow to increase crude exports, potentially adding supply to global markets and limiting further upside in oil prices.
• US inventories: US crude oil inventories fell by 1.7 million barrels in the week ending July 10, leaving stockpiles approximately 6% below the five-year average.

Closing statement: WTI remains under pressure despite escalating geopolitical tensions, as increased Russian exports and cautious market sentiment offset supply concerns. Investors will continue monitoring developments in the Middle East, particularly around the Strait of Hormuz, while US inventory trends remain an important indicator for near-term price direction.

• DAX 40 Price: The DAX 40 is trading lower around the 24,900-point mark on Thursday, extending its recent consolidation phase.
• German government: German Chancellor Friedrich Merz acknowledged that US tariffs have significantly weighed on Germany's economy. He also stated that the government is reviewing several proposals to reform the country's debt brake while emphasizing that Germany's credit rating remains secure, helping to reassure investors about the country's fiscal stability.
• EU-Google: The European Commission is expected to announce a series of regulatory actions against Google under the Digital Markets Act (DMA).
• Fed Chair: Federal Reserve Chair Kevin Warsh said that recent inflation data should not be viewed as a perfect measure of underlying price pressures, although he welcomed signs that inflation is moving in the desired direction.
• ABB results: Strong quarterly earnings from Swiss engineering group ABB are expected to support sentiment across the European industrial sector. Investors will also look for potential positive spillover effects on German industrial leaders such as Siemens and Siemens Energy, given their similar business exposure.

Closing statement: The DAX 40 remains under modest pressure as investors balance concerns over tariffs and regulatory developments with encouraging corporate earnings. Market attention is likely to remain focused on industrial sector performance and central bank signals as traders assess the outlook for Germany's economy.