Daily Analysis 28/11/2025

• GBP/USD Price: GBP/USD moves lower on Friday, slipping toward 1.3200 and giving back part of its weekly gains as markets turn cautious and the USD regains modest traction.
• Budget Speech: In her Budget speech, Chancellor Rachel Reeves declared that the government had “beat” this year’s growth forecasts and will “beat them again,” emphasizing improved momentum.
• Growth Narrative: Reeves highlighted ongoing investment efforts (“brick by brick”) pointing to infrastructure expansion, housing development, and broader construction activity as engines of growth.
• Bonds Market: The bond market responded constructively to the Budget, with the £22bn fiscal buffer reassuring investors. Markets appear willing to tolerate higher borrowing relative to OBR’s prior projections.
• BoE's Greene: BoE MPC Member Megan Greene warned that despite stabilized inflation, second-round effects remain her main concern, signaling the Bank is not yet comfortable with easing pressures.

Closing statement: GBP/USD faces modest downside pressure as strong fiscal messaging is offset by cautious signals from the Bank of England and a firmer dollar. While the UK budget narrative supports a constructive medium-term outlook, concerns over inflation persistence and global risk sentiment may limit sterling gains in the near term.

• XAU/USD Price: Gold trades calmly below $4,200 after Thursday’s volatility, yet remains more than 2.5% higher for the week, reflecting resilient safe-haven demand.
• Market Signals: Markets have stabilized due to rising expectations of rate cuts from both the Fed and the BoE, combined with a renewed AI-driven equity rally led by Google’s 20% monthly surge and strong broader market gains.
• Peace Signals: Comments from President Putin suggesting Trump’s proposals could serve as a basis for peace talks have softened geopolitical tensions, providing an additional layer of support for market sentiment.
• Gold Demand: Physical gold shipments from Hong Kong to China declined, indicating softer near-term bullion demand and suggesting a potential cap on upside momentum despite broader market support.
• Japan–China: Japan–China tensions escalated after Prime Minister Sanae Takaichi voiced support for Taiwan’s independence, injecting a fresh geopolitical risk premium into precious metals.

Closing statement: Gold maintains a constructive weekly profile, supported by easing-rate expectations and moderate geopolitical tailwinds. However, signs of weakening physical demand in China may slow upside extension, leaving XAU/USD sensitive to incoming macro signals and shifts in risk sentiment.

• Crude Oil Price: WTI trades lower early Friday near $58.80 per barrel, easing from Thursday’s $59.02 close as bearish momentum persists into the European session.
• Mixed Signals: Kremlin spokesman Peskov warned that a Ukraine–Russia agreement remains distant with no major concessions expected, while former President Trump claimed a deal is “very close,” generating conflicting geopolitical cues for oil markets.
• Japan Reliance: Japan’s economy ministry reiterated that crude and natural gas imports, including those from Russia, remain critical for national energy security, highlighting the enduring influence of projects such as Sakhalin-1.
• Teapot Support: China boosted crude import quotas for independent refiners to roughly 8 million tons across 21 plants, up sharply from last year. The increase arrives as the physical market faces a glut of unsold sanctioned barrels.
• Shadow Fleet: Russian “shadow fleet” tankers expanded the use of false flags in 2025 and exported an estimated $5.4 billion worth of oil through September, according to CREA, underscoring persistent opacity in global supply flows.

Closing statement: WTI holds a mildly bearish bias as geopolitical uncertainty and opaque Russian flows weigh on sentiment. Still, increased Chinese import activity may cushion downside risk, leaving prices sensitive to developments in peace negotiations and broader demand signals.

• DAX Price: Germany’s DAX 40 trades around 23,760 points on Friday, holding relatively stable despite mixed signals from the broader economy.
• Sales Surge: German Retail Sales rose 0.9% YoY in October, significantly beating expectations of 0.2% and marking a stronger performance than September’s revised 0.8%, according to Destatis.
• Labor Strains: Unemployment increased by only 1,000 in November, far below the 5,000 rise expected, pointing to a sluggish but not worsening labor market as the recovery struggles for momentum.
• Price Drop: Import prices fell 1.4% YoY in October, a slightly softer decline than economists forecast, suggesting some easing in cost pressures for industrial firms.
• Slow Impact: Chancellor Friedrich Merz’s push for higher infrastructure and defense spending has yet to materially improve economic conditions, with benefits expected to emerge only gradually.

Closing statement: The DAX continues to move cautiously as Germany’s economy shows uneven signals—stronger retail activity but persistent labor and price weaknesses. Markets appear to be waiting for clearer evidence that fiscal stimulus will translate into real growth momentum.