Daily Analysis 20/07/2026

• GBP/USD Price: The GBP/USD pair is trading around 1.3450 during Monday's European session, remaining largely unchanged.
• Political transition: Andy Burnham is set to become the UK's new Prime Minister after securing 379 nominations last week. Investors are now closely watching the appointment of the next Chancellor, as the choice will provide important clues on whether the government will maintain fiscal discipline or adopt a more expansionary economic agenda.
• US diplomacy: US Secretary of State Marco Rubio reiterated that Washington remains open to a diplomatic resolution with Iran while urging other countries to take greater responsibility for protecting commercial shipping through the Strait of Hormuz.
• Fed tightening: According to the CME FedWatch Tool, the probability of a Federal Reserve rate hike in July has fallen to 14%, down from 25% a week earlier. However, markets continue to price in around 30 basis points of additional tightening by December, indicating expectations for further policy action later this year.
• Consumer confidence: The University of Michigan Consumer Sentiment Index rose from 50.7 to 54.0 in July, supported by lower gasoline prices.

Closing statement: GBP/USD remains range-bound as investors balance UK political developments against changing expectations for Federal Reserve policy. Attention will remain on the UK's new government, upcoming economic data, and central bank signals for the pair's next move.

• XAU/USD Price: Gold (XAU/USD) is trading close to the $4,000 psychological level during Monday's European session, holding broadly unchanged.
• China AI: China's National Development and Reform Commission (NDRC) unveiled a new AI action plan following President Xi Jinping's keynote speech at the World AI Conference in Beijing.
• Earnings season: Corporate earnings season accelerates this week with results expected from major companies including Alphabet (Google), Tesla, Intel, American Express, 3M, and Novartis.
• Fed's Hammack: Cleveland Fed President Beth Hammack stated that interest rates may need to rise further if inflation remains persistent.
• Inflation expectations: US one-year inflation expectations declined from 4.6% to 4.2% in July, while five-year inflation expectations remained unchanged at 3.3%.

Closing statement: Gold continues to consolidate around the $4,000 level as easing inflation expectations and strong corporate earnings optimism are offset by the Federal Reserve's hawkish rhetoric. Investors will closely monitor this week's earnings reports and upcoming US economic data for further direction in the precious metals market.

• Crude Oil Price: West Texas Intermediate (WTI) begins the week on a strong note, rising to around $83.50 per barrel, its highest level since June 12.
• Strait of Hormuz: Iran's Islamic Revolutionary Guard Corps (IRGC) warned that the Strait of Hormuz will not be safe for the transit of oil, gas, or petrochemical products as long as US military operations continue in the region.
• Oil exports: According to Kpler and Vortexa data cited by Reuters, crude oil and condensate exports from the Persian Gulf recovered to 12–13.6 million barrels per day during the first half of July, returning to pre-conflict levels.
• China fuel: Following last week's sharp increase in global crude prices, China announced higher domestic retail prices for gasoline and diesel, effective July 18.
• African countries: Ongoing restrictions around the Strait of Hormuz are exposing the dependence of several African nations and major Asian economies, including China, on Middle Eastern energy supplies.

Closing statement: WTI remains firmly supported above $83.00 as escalating tensions between the US and Iran continue to dominate market sentiment. While recent export volumes have recovered, persistent risks surrounding the Strait of Hormuz and shifting global energy dynamics are likely to keep oil prices elevated and volatile in the near term.

• DAX 40 Price: The DAX 40 is trading around 24,770 points on Monday, remaining under pressure as investors continue to assess corporate developments and the outlook for Germany's export-driven economy.
• Siemens transformation: Siemens announced the completion of its Erlangen campus, bringing together its sites across Nuremberg and the surrounding region. The project represents one of the company's largest transformation initiatives in recent years and is expected to improve operational efficiency and collaboration.
• German automakers: China, once a key growth market for Germany's premium car manufacturers, has become increasingly difficult due to weaker consumer spending, the prolonged property market downturn, stronger competition from domestic Chinese brands, and changes to luxury car taxation. These factors continue to pressure sales and earnings prospects for German automakers.
• Deutsche Telekom: Deutsche Telekom strengthened its media portfolio by winning the rights to broadcast 104 matches of the 2030 FIFA World Cup.
• World Cup demand: Adidas reported that sales of World Cup jerseys have quadrupled compared with the previous tournament, while ball sales have doubled.

Closing statement: The DAX 40 remains on the defensive despite positive company-specific developments. Investors continue to focus on the challenges facing Germany's industrial and automotive sectors, while strong performances from companies such as Siemens, Deutsche Telekom, and Adidas provide some support to broader market sentiment.