Daily Analysis 19/11/2025

• GBP/USD Price: The pair trades around 1.3140, reflecting a subdued tone during European hours on Wednesday. Momentum remains weak as markets digest both UK macro data and U.S. labor indicators.
• UK inflation: The annual CPI fell to 3.6% in October, matching forecasts and reinforcing the narrative that inflation is returning toward target. This increases market confidence that the Bank of England may proceed with a rate cut next month.
• UK fiscal policy: Franklin Templeton’s David Zahn warned that the upcoming 26 November budget could trigger a spike in UK bond yields if Chancellor Reeves disappoints on fiscal credibility. Such volatility would likely weigh on the pound by tightening financial conditions.
• Depositor Prrotection: The UK’s bank and building society protection limit will rise to £120,000, a significant jump from £85,000. This strengthens consumer confidence in the financial system, although the direct FX impact remains modest.
• Labor Data: The ADP report indicated that U.S. employers cut an average of 2,500 jobs per week during the four weeks ending November 1. While not dramatic, it adds to evidence of a cooling U.S. labor market and keeps USD movements data-dependent.

Closing statement: GBP/USD remains under downward pressure as UK rate-cut expectations intensify and fiscal risks add an additional layer of caution. U.S. labor data continues to guide dollar sentiment, keeping the pair vulnerable to short-term volatility.

• XAU/USD Price: XAU/USD continues to climb after rebounding from a one-and-a-half-week low just below the $4,000 psychological mark. The metal maintains positive traction on Wednesday as safe-haven flows support demand.
• Political Pressure: Comments from President Donald Trump, stating he “would love” to remove Fed Chair Powell immediately and already has alternative candidates.
• FOMC Minutes: The October meeting minutes are expected to attract attention due to a widening range of views among Fed officials. Recent hawkish communication increases the potential for volatility, with gold often reacting inversely to higher rate expectations.
• Geopolitical Escalation: Ukraine’s military confirmed strikes on targets inside Russia using US-supplied ATACMS missiles, adding to geopolitical tensions. Zelenskiy’s planned visit to Turkey to revive stalled peace talks underscores the fragile situation, which generally supports gold prices.
• Diplomatic Mission: US envoy Steve Witkoff is expected to join the discussions, but the Kremlin has stated no Russian delegates will attend. The absence of key parties undermines prospects for near-term de-escalation, maintaining a supportive backdrop for gold.

Closing statement: Gold remains bid as political uncertainty in the U.S., hawkish Fed dynamics, and elevated geopolitical risks continue to underpin safe-haven demand. XAU/USD may hold its upward bias in the near term unless FOMC minutes significantly shift rate expectations.

• Crude Oil Price: West Texas Intermediate (WTI) slips again, trading around $60.10 per barrel, down from Tuesday’s $60.68 close. Persistent downside pressure highlights weakening short-term momentum.
• US inventories: API data showed a 4.4 million-barrel increase in US crude stockpiles, marking the third consecutive weekly build and the largest in over five months. The sustained inventory growth adds to concerns that domestic demand remains soft.
• Supply Concerns: The International Energy Agency (IEA) projects a record market surplus next year, amplifying fears that global supply will exceed consumption. This reinforces a broadly bearish tone for crude markets.
• China's Rate: China is expected to keep its Loan Prime Rates unchanged, as the PBOC’s repo rates have remained stable. With no policy easing anticipated, oil bulls receive little support from the world’s largest crude importer.
• US Sanctions: Traders are watching upcoming US sanctions on Rosneft and Lukoil, set to take effect on Friday. The measures could tighten supply if they significantly disrupt Russian export flows, offering a potential floor for prices.

Closing statement: WTI remains under pressure as rising inventories and global surplus projections dominate sentiment, while China offers no fresh stimulus. However, upcoming US sanctions on Russian producers could introduce supply risks that partially offset the bearish outlook.

• DAX Price: The index trades near 23,175 points on Wednesday morning after briefly dipping to 23,085 on Tuesday. Despite the weakness, it narrowly held above its exponential 200-day moving average, a key technical support level.
• Industrial Competitiveness: The latest ifo survey shows a sharp deterioration in competitiveness both outside and within the EU. Over 36% of firms report weakening competitiveness globally, while 21.5% report declines within the EU—both the worst readings on record.
• Political Tensions: A dispute over proposed pension changes threatens to destabilize the coalition government. Conservative youth groups are pushing back against legislation they argue shifts the financial burden onto younger generations.
• German Bunds: Fresh doubts about a potential December Fed rate cut have encouraged investors to take profits on equities. The German Bund future has broken its correction trend since June, reflecting increased bond demand and shifting risk sentiment.
• Nvidia Earnings: Nvidia’s upcoming earnings release is seen as a critical test for the durability of the AI-driven equity rally. With major tech stocks under pressure, the results could influence global risk appetite, including sentiment toward European equities.

Closing statement: The DAX remains under pressure amid weakening industrial competitiveness and rising political uncertainty. While technical support is still intact, global sentiment—especially around US rate expectations and Nvidia’s earnings—will likely dictate the next major move.