Daily Analysis 09/12/2025

• GBP/USD Price: The pair attracts moderate buying during the European session, stabilizing after Monday’s choppy and directionless price action.
• OECD Outlook: The OECD’s improved growth forecast on UK and its expectation that the BoE will end its easing cycle in Q2 2026 provide medium-term support for the pound.
• Rate Cut: Markets price in another BoE rate cut. Investors assign a 90% probability to a 25 bps cut to 3.75% at the upcoming meeting, marking the sixth rate cut since August 2024 and keeping policy firmly in easing mode.
• BoE Commentary: Dovish policymaker Taylor emphasized cooling wage and services inflation and noted that inflation is on track to return to target in the near term, though policy remains slightly restrictive.
• Fed Decision: The Federal Reserve is expected to cut rates by 25 bps at its final 2025 meeting on Wednesday, a move that could shape near-term USD direction and volatility in GBP/USD.

Closing statement: GBP/USD is supported by improved UK macro expectations but remains sensitive to central bank policy divergence, with the upcoming Fed and BoE decisions likely to dictate the next directional move.

• XAU/USD Price: XAU/USD remains under mild pressure for a third consecutive session but shows no strong bearish momentum, continuing to trade within a narrow one-week range during Tuesday’s Asian session.
• Fed Rate: The CME FedWatch Tool shows nearly 90% probability of a 25 bps rate cut, keeping yields subdued and helping to limit downside in gold despite recent softness.
• Fed Conference: Traders will closely monitor Powell’s press conference and the updated dot plot on Wednesday for clearer signals on the 2026 rate path, which could trigger a breakout from gold’s current consolidation zone.
• China’s Inflation: November CPI is projected to rise to 0.7% y/y, up from 0.2%, with core inflation firming over recent months, signaling gradual stabilization in the Chinese economy, a supportive factor for commodity demand.
• US–China: Trump’s decision to allow Nvidia’s H200 chip exports to China, subject to a higher 25% fee, marked a tactical easing in tech restrictions, though Beijing has shown skepticism, highlighting ongoing policy uncertainty.

Closing statement: Gold remains directionally neutral ahead of major Fed signals, with macro data from China and shifting US–China tech dynamics adding secondary influences to near-term price action.

• Crude Oil Price: Crude oil prices pull back on Tuesday, with WTI trading near $58.55, slightly below Monday’s close, reflecting continued softness in short-term demand sentiment.
• Ukraine support: The UK Prime Minister’s office signaled that European leaders agree on the need to increase assistance to Ukraine, adding geopolitical uncertainty that can influence energy markets.
• US Stance: Comments from the US President’s son suggesting Trump may withdraw support for Ukraine introduce additional geopolitical risk, potentially impacting future supply and risk premiums.
• Kazakhstan Supply: Following drone damage to the CPC Black Sea terminal, Kazakhstan will deliver 50,000 metric tons of crude directly to China from the Kashagan field, supporting stable Chinese supply despite regional disruptions.
• India's Demand: India’s November fuel consumption surged to its strongest level since May, driven by post-monsoon construction and agricultural activity, providing a positive signal for global oil demand.

Closing statement: WTI remains under pressure despite signs of resilient Asian demand, as geopolitical uncertainty and shifting supply flows continue to shape short-term market dynamics.

• DAX Price: The DAX 40 trades near 24,090, having broken key resistance and signaling continued upside potential toward the 24,200 area.
• German Data: Despite signs of brief stabilization, sentiment indicators remain fragile: the Ifo Index fell in November, and Manufacturing PMI slipped to 48.2, marking the sharpest contraction since February.
• Germany Challenges: Foreign Minister Wadephul noted that significant work remains in negotiations with China to obtain more flexible export licenses for rare earths, critical inputs for German industry.
• ECB Policy: ECB member Kazimir reiterated that there is no justification for rate changes, confirming that no move is expected at the upcoming December meeting.
• US Policy: White House NEC Director Hassett stated that Powell agrees rates should move lower, while warning against making a fixed six-month rate commitment, helping stabilize broader market expectations.

Closing statement: Bullish technical momentum supports the DAX in the near term, but weak German data and uncertain global policy dynamics continue to challenge the durability of the rally.