Daily Analysis 25/02/2026

• GBP/USD Price: GBP/USD remains in positive territory for a fourth consecutive session, trading near the 1.3530 level during European hours. The sustained advance indicates steady buying interest, even as domestic fundamentals introduce mixed signals for Sterling.
• Political developments: A special election in Manchester’s Gorton and Denton constituency is scheduled for Thursday, seen as a key political test for Prime Minister Keir Starmer. Heightened political scrutiny and internal party discontent could add a layer of uncertainty to UK assets, including the Pound.
• Retail activity: The Confederation of British Industry reported a sharp deterioration in the Retail Sales Balance, which fell to -43 in February. This highlights continued weakness in consumer demand, reinforcing concerns about the durability of UK economic growth.
• Rate cut: BoE Governor Andrew Bailey told Parliament that a March rate cut remains a “genuinely open question,” citing services inflation at 4.4%, above the Bank’s projection. This signals a cautious approach to easing, offering some near-term support to Sterling by pushing back against aggressive rate-cut expectations.
• BoE's Pill: Chief Economist Huw Pill warned against overconfidence in the recent easing of headline inflation toward the 2% target. His comments underscore the BoE’s vigilance on underlying inflation pressures, suggesting policy will remain data-dependent.

Closing statement: GBP/USD continues to grind higher amid supportive price momentum and cautious BoE rhetoric, though weak domestic consumption data and political uncertainty may limit the scope for sustained upside in the near term.

• XAU/USD Price: Gold has attracted renewed buying interest early Wednesday after undergoing a corrective pullback from monthly highs on Tuesday. Trading around the $5,185 level, price action suggests buyers are stepping back in, maintaining the broader bullish structure despite recent profit-taking.
• FOMC Minutes: Minutes from the January meeting of the Federal Open Market Committee revealed that several officials believe additional policy easing may be premature without clearer evidence that disinflation progress has resumed.
• Tariff policy: In his State of the Union Address, Donald Trump announced a shift to temporary global tariffs of 10% under Section 122, with plans to move toward 15%. Such measures revive concerns over trade-driven inflation and policy uncertainty, both of which tend to support demand for gold as a hedge.
• Fed communication: Richmond Fed President Thomas Barkin stated that current monetary policy is well-positioned to manage risks to the economic outlook. His comments reinforce the Fed’s wait-and-see approach, helping anchor expectations and reducing the likelihood of abrupt shifts in financial conditions.
• Consumer confidence: The Conference Board reported that its Consumer Confidence Index rose to 91.2 in February from January’s revised 89.0. Improved sentiment points to resilience in the US economy, which could temper safe-haven flows but has not yet undermined gold’s underlying support.

Closing statement: XAU/USD remains resilient as trade policy uncertainty and cautious Fed messaging offset improving US sentiment, suggesting gold may continue to consolidate with an upward bias as long as macro risks persist.

• Crude Oil Price: WTI prices weakened in the previous session, settling more than 1% lower and currently trading near the $66 level. This decline reflects renewed supply-side concerns and signals fading bullish momentum after the recent recovery phase.
• US inventories: The American Petroleum Institute reported a sharp crude inventory build of 11.4 million barrels for the week ending February 20, far exceeding expectations. This unexpected surge in stockpiles highlights softer near-term demand or excess supply, exerting downward pressure on prices.
• Russian crude: Russia’s growing crude sales to China, alongside declining Indian demand, have forced Moscow to rely on a larger fleet of supertankers. This logistical adjustment underscores continued resilience in Russian exports, adding to global supply availability despite sanctions.
• Middle East: Geopolitical risks remain elevated as United States F-22 fighter jets are now stationed in Israel, while reports suggest Iran is nearing a deal to acquire advanced Chinese anti-ship missiles. Such developments raise tail-risk concerns for regional supply disruptions, partially offsetting bearish fundamentals.
• Supply outlook: The next OPEC+ meeting on March 1 is expected to pave the way for resumed supply increases from April. Despite market balance indicators suggesting additional supply is unnecessary, the prospect of higher output adds a medium-term headwind for oil prices.

Closing statement: WTI is under pressure from rising inventories and looming OPEC+ supply increases, while geopolitical tensions provide only limited support, suggesting downside risks may dominate unless supply disruptions or demand improvements materialize.

• DAX Price: The DAX moved back above the 25,000-point level on Wednesday, supported by improved risk sentiment ahead of the highly anticipated Nvidia earnings report. The move reflects spillover optimism from global equity markets, particularly the technology sector.
• German GDP: Final Q4 GDP data released by Destatis confirmed quarter-on-quarter growth of 0.3%, in line with preliminary estimates. The gradual recovery is being underpinned by expansionary fiscal policy and interest rate cuts from the European Central Bank, supporting the broader equity outlook.
• Consumer sentiment: The consumer sentiment index published by GfK and the Nuremberg Institute for Market Decisions slipped further into negative territory. Persistently weak consumer confidence highlights ongoing pressure on household demand, potentially limiting upside for domestically focused stocks.
• BMW recall: BMW announced a recall of 58,713 vehicles in the US due to a wiring harness issue, as reported by the National Highway Traffic Safety Administration. While the recall poses short-term cost and reputational considerations, it is unlikely to materially impact the broader index.
• E.ON investment: E.ON revealed plans to significantly increase investment, committing €48 billion between 2026 and 2030 to meet rising electricity demand linked to AI and the energy transition. This long-term capital commitment underscores structural growth opportunities within the utilities and infrastructure space.

Closing statement: The DAX is supported by confirmed economic recovery and strong sector-specific investment themes, though weak consumer sentiment suggests gains may remain selective rather than broad-based in the near term.