Daily Analysis 11/12/2025

• GBP/USD Price: The GBP/USD pair trades in negative territory near 1.3370 early Thursday, pressured by a rebound in the US Dollar.
• FOMC Guidance: The FOMC statement said yesterday, “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
• Powell's Caution: Fed Chair Jerome Powell noted during the press conference that the central bank is well-positioned to wait and see how the economy evolves.
• Wage Cooldown: The US Q3 Employment Cost Index showed wage growth slowing to 0.8% q/q, a pace considered ideal for supporting consumption without reigniting inflation.
• BoE Odds: Markets are pricing nearly an 88% probability of a BoE rate cut next week as UK inflation pressures continue to ease.

Closing statement: GBP/USD softens as the Dollar strengthens post-FOMC, while expectations of a BoE cut keep the pair under pressure.

• XAU/USD Price: Gold retreats after a modest Asian-session uptick toward $4,247, snapping a two-day winning streak.
• Fed Outlook: The Fed's economic projections suggested one rate cut will take place next year, although new data could change this.
• Growth Upgrade: The Fed also revised its economic projections. The US Gross Domestic Product (GDP) is now projected at 1.7% this year, up from the previous forecast of 1.6%. For 2026, the economy is expected to grow by 2.3%, above the 1.8% estimated in September.
• PCE Projection: The Personal Consumption Expenditures (PCE) Price Index is estimated to fall at 2.9% by the end of the year, below the 3.0% projected in September.
• Geopolitical Risks: Slow progress in Russia–Ukraine ceasefire negotiations keeps geopolitical uncertainty elevated, limiting deeper gold downside.

Closing statement: Gold softens after reaching weekly highs, but dovish Fed expectations and geopolitical tensions help cushion losses.

• Crude Oil Price: WTI crude continues to decline, trading near $57.90 per barrel. The move underscores weak sentiment as traders react to both supply increases and softer-than-expected demand.
• OPEC+ Summary: OPEC+ began unwinding roughly 2.9 million bpd of production cuts in 2025, increasing global supply and placing downward pressure on prices. The shift aims to reclaim market share in the face of rising U.S. shale production.
• Demand Side: Demand growth in 2025 has been disappointing, with the IEA projecting only 0.7 million bpd compared to OPEC’s 1.3 million estimate.
• Geopolitical News: Geopolitical tensions escalated after Ukrainian drones disabled a Russian oil-trading tanker in the Black Sea, marking the third such attack in two weeks.
• India's Purchases: Indian refiners are set to purchase the highest volume of Russian crude in six months, with arrivals estimated at 1.85 million bpd despite new U.S. sanctions.

Closing statement: WTI remains under pressure as rising supply and weaker-than-expected demand outweigh geopolitical risks. Unless economic conditions improve or OPEC+ signals a shift back toward tighter policy, the price bias is likely to stay mildly bearish in the near term.

• DAX Price: The DAX remains slightly above 24,000 points following the Fed’s latest decision, reflecting cautious stability in European equities.
• FOMC Outlook: The FOMC’s median forecast is losing relevance as internal divisions widen, with yesterday’s decision marked by three dissents. Two members preferred no change, while Trump-appointed Stephan Miran pushed for a 50bp cut, highlighting policy fragmentation.
• Trump's Pushing: Donald Trump signaled that the rate cut should have been larger and is expected to announce his preferred Fed Chair pick soon. Markets interpret this as a push to accelerate dovish realignment within the Fed.
• Trade Performance: Germany’s foreign trade performance continues to weaken, with the rolling 12-month trade surplus falling to €202bn from its July peak of €252bn.
• AI Progress: The U.K. and Germany are becoming important hubs for AI-driven defense startups, fueled by rising geopolitical tensions and expanding military budgets. Private investment is accelerating as governments rearm in response to the Russia-Ukraine conflict and U.S. pressure on NATO.

Closing statement: The DAX remains range-bound as global monetary policy uncertainty and weakening German trade weigh on sentiment. A more dovish Fed may provide short-term support, but sustained upside will likely depend on improvements in Germany’s export performance and broader economic momentum.