Daily Analysis 25/11/2025

• GBP/USD Price: The pair rises for a fourth straight session, reaching ~1.3115 in early Tuesday trading as improved risk sentiment supports the Pound.
• UK inflation: CPI eased to 3.6% in October, reinforcing market conviction of an 80% probability of a 25 bps cut in December. Falling gilt yields reflect growing confidence in looser policy.
• UK Budget: Chancellor Rachel Reeves is expected to raise income taxes to close a £22 billion fiscal gap. Anticipation of tighter household budgets limits upside for the Pound.
• OBR Downgrade: The Office for Budget Responsibility has reportedly cut the UK’s growth outlook through 2030–31, citing years of underinvestment and structurally weaker expansion potential.
• Fed Easing: Fed Governor Christopher Waller highlighted ongoing labor-market softness, signaling support for another 25 bps rate cut in December, placing mild downward pressure on the USD.

Closing statement: GBP/USD remains supported by improving risk appetite and expectations of a December Fed cut, but UK fiscal risks and looming tax hikes could cap further upside.

• XAU/USD Price: The continued upward momentum reflects strong safe-haven demand and a favorable macro backdrop. Price action shows buyers maintaining control as markets reassess Fed expectations.
• Fed's Waller: Waller's remarks, highlighting likely downward revisions to payrolls and concentrated hiring, reinforce dovish expectations. This directly boosts gold by lowering yield and dollar pressures.
• Market Odds: The probability of a Fed rate cut next month surge to 80% on Tuesday after falling to 30% in the previous week, according to the CME FedWatch.
• Geopolitical News: Tensions escalate following Russia’s strikes on Kyiv. The attacks, hitting residential and energy infrastructure, revived safe-haven flows. Markets interpreted the escalation, occurring shortly after US-Ukraine negotiations, as a risk premium catalyst for gold.
• US Data: Estimates point to a 0.3% MoM rise in PPI and 0.4% MoM in Retail Sales for September. Strong data may temper gold's gains temporarily, while softer readings could reinforce the bullish case.

Closing statement: Gold’s short-term outlook remains constructively biased to the upside, supported by a dovish Fed narrative, elevated geopolitical risk, and renewed safe-haven positioning. The next directional cues will largely depend on US data and confirmation of rate-cut expectations.

• Crude Oil Price: West Texas Intermediate (WTI) Oil price falls on Tuesday, early in the European session. WTI trades at $58.45 per barrel, down from Monday’s close.
• Ukraine-Russia Deal: President Trump remains “hopeful” about a deal, though progress is unclear, and the revised 19-point plan excludes limits on Ukraine’s army size. This raises uncertainty about Russia’s acceptance, limiting any bullish risk-premium rebound in oil.
• Other News: Israel, according to the Gaza Government Media Office, has violated the United States-brokered Gaza ceasefire at least 497 times in 44 days.
• JPMorgan Outlook: JPMorgan says a global oil surplus could push Brent into the $30s by late 2027 if supply isn’t cut. Demand is rising, but supply is growing three times faster, mainly from non-OPEC+ producers.
• Russia Exports: Russia could boost its crude oil exports to China, extending existing agreements, Deputy Prime Minister Alexander Novak said today, noting specifically a deal for the export of Russian crude via Kazakhstan that could be extended by 10 years until 2033.

Closing statement: WTI’s short-term outlook remains fragile, with prices under pressure from geopolitical uncertainty and rising supply expectations. While risk events could create temporary volatility, the structural bias leans bearish unless demand indicators improve or producers signal coordinated supply cuts.

• DAX Price: Germany’s benchmark index remains under pressure as investors digest weak domestic macro data. Market sentiment is fragile, with no immediate catalysts for a sustained rebound.
• Q3 GDP: Destatis reported 0.0% QoQ growth, following a –0.2% contraction in Q2, underscoring a prolonged period of economic stagnation. The data reinforces concerns that Germany, Europe’s largest economy, continues to struggle with structural and cyclical headwinds.
• GDP Comment: Destatis president Ruth Brand highlighted that tepid export performance weighed heavily on Q3 growth, partially offset by a slight rise in investment. The stagnation challenges Chancellor Friedrich Merz’s efforts to revive momentum through expanded fiscal spending.
• Car Sales: Car sales rose 4.9% in October, led by electric vehicles. ACEA data shows EV registrations outpacing petrol and diesel models, providing a bright spot for the region’s industrial outlook. Stronger auto demand may offer limited support to German manufacturers, though it has not been enough to lift market sentiment.
• US–China Trade: US-China trade talks lifted market sentiment in the Asian session on Tuesday, November 25. President Trump shared details of the call, stating it was very good, while declaring a visit to Beijing in April. President Xi also reportedly agreed to a state visit, signaling a thawing in US-China relations.

Closing statement: The DAX’s outlook remains cautious as Germany grapples with stagnant growth and export weakness. While improving global trade sentiment offers some relief, domestic economic challenges continue to dominate investor positioning.