Daily Analysis 30/04/2025

• GBP/USD Price: The GBP/USD pair remains under pressure, trading below the 1.3400 level during Wednesday’s European session. A stronger US Dollar, driven by renewed investor optimism, continues to weigh on the pair.
• Rate Cut Expectations: The British Pound faces additional selling pressure as markets increasingly price in a rate cut by the Bank of England in its May meeting. This dovish shift adds to the bearish sentiment surrounding the currency.
• BoE’s Greene: BoE policymaker Megan Greene suggested that Trump’s tariffs may lead to lower UK inflation, reinforcing the central bank’s cautious stance. Such comments support the case for easing monetary policy.
• US JOLTS: Tuesday’s US JOLTS report revealed a drop in job openings to 7.19 million in March, its lowest level since September 2024, suggesting cooling labor demand.
• Consumer Confidence: The Conference Board’s Consumer Confidence Index fell sharply to 86.0 in April from the previous reading of 93.9, its lowest reading since April 2020. This report suggests the weakening of the US economy.

Closing statement: GBP/USD remains tilted to the downside, pressured by BoE rate cut bets and a resilient US Dollar. The pair may struggle to regain ground unless either UK data surprises positively or US economic weakness deepens further.

• XAU/USD Price: Gold prices face continued selling pressure for a second day, with spot XAU/USD slipping amid waning geopolitical fears and easing trade tensions. Risk appetite has modestly improved, curbing the appeal of the non-yielding metal.
• Tariff Reversal: A resilient US Dollar, supported by Trump's order easing auto tariffs, is undermining gold's upside. The move signals a softer stance on trade, reducing investor need for traditional safe-haven assets like gold.
• US GDP: Markets are bracing for a sharp GDP slowdown, with the first estimate for Q1 2025 expected at just 0.4%—down from 2.4% in Q4 2024. Goldman Sachs forecasts a negative 0.2% print, potentially setting the stage for future Fed easing, which could be bullish for gold longer-term.
• Geopolitical Tensions: Russia's rejection of Ukraine’s extended ceasefire proposal limits any meaningful escalation in conflict for now. This geopolitical de-escalation adds to the diminished urgency for hedging via gold.
• US Data: Investors now shift focus to Wednesday’s high-impact US data releases—including the ADP jobs report, Q1 GDP, and the PCE inflation index—which will be crucial for gauging the Fed's next policy steps and short-term direction for gold.

Closing statement: Gold prices remain under pressure amid stronger USD, trade optimism, and cooling geopolitical risks. However, soft US macro data could offer near-term relief if it revives Fed rate cut expectations.

• Crude Oil Price: West Texas Intermediate (WTI) Oil continues its downward trajectory for a third straight session, trading near $59.60 per barrel during Wednesday's European session.
• Monthly Level: Persistent bearish sentiment is pushing oil toward its steepest monthly drop since November 2021, with losses exceeding 15%. The escalating trade conflict has heightened recession fears.
• API Inventory Data: US crude inventories surged by 3.8 million barrels last week, well above the 400,000-barrel increase forecasted by analysts. The significant build signals sluggish demand or oversupply, further weighing on oil prices.
• Strategic Reserve: Despite the price drop, US Energy Secretary Chris Wright reaffirmed the commitment to refill the Strategic Petroleum Reserve (SPR), citing attractive price levels. This may offer some medium-term support but has limited immediate impact on market sentiment.
• OPEC+ Meeting: Looking ahead to the May 5 OPEC+ meeting, several member nations are expected to push for accelerated production hikes in June. If agreed upon, this could introduce additional supply pressures, amplifying the bearish bias in oil markets.

Closing statement: WTI remains under intense pressure amid a perfect storm of oversupply concerns, weak demand outlook, and escalating trade tensions. Near-term sentiment is clearly bearish, with further downside risk unless OPEC+ signals restraint or geopolitical tensions re-escalate to spur safe-haven buying.

• DAX Price: The DAX closed higher for a sixth straight session, ending at 22,426 on April 29, supported by strong corporate earnings. This resilience comes despite ongoing trade policy uncertainties, signaling robust investor confidence.
• Import Prices: German import prices rose 2.1% YoY in March, continuing the upward trend from 3.6% in February and 3.1% in January. The data suggest underlying inflationary pressures, which could complicate the ECB’s policy stance if sustained.
• Retail Sales: German retail sales fell 0.2% MoM in March, slightly better than expected, but accompanied by downward revisions to February figures. This indicates persistent weakness in domestic consumption, a potential drag on GDP growth.
• Inflation Data: With regional German CPI prints due today, all eyes are on how April inflation trends evolve, particularly core inflation, which stood at 2.6% in March. The results will play a key role in shaping expectations for ECB rate action.
• Earning Reports: Investor attention remains fixed on corporate results, especially from Mercedes-Benz, Volkswagen, and Airbus. These earnings will be watched for any tariff-related commentary and guidance impacting broader index performance.

Closing statement: The DAX remains technically strong, driven by earnings optimism, but macro headwinds from inflation and retail weakness could test momentum. Upcoming CPI data and corporate guidance will be pivotal for sustaining the current uptrend.