Daily Analysis 12/12/2025

• GBP/USD Price: GBP/USD remains in bullish territory but faces clear resistance at the 1.3400 level. The stalling momentum suggests buyers may need stronger macro catalysts to extend gains.
• UK Contraction: UK GDP contracted by 0.1% in October, matching September’s decline and reinforcing recessionary pressures. Persistent weakness in output limits upside potential for the pound despite recent market optimism.
• Output Rebound: Industrial and manufacturing production showed monthly gains of 1.1% and 0.5%, offering a partial offset to weak GDP data. However, these improvements are not yet strong enough to shift the broader economic narrative.
• Fed Stability: The Fed unanimously reappointed all 11 regional presidents, easing concerns about political interference amid heightened scrutiny from the Trump administration. Institutional stability supports a more predictable Dollar environment.
• Labor Market: US Initial Jobless Claims rose to 236K, exceeding expectations of 220K and signaling a softening labor market. The weaker data limits Dollar strength and may help keep GBP/USD supported in the near term.

Closing statement: GBP/USD is consolidating below key resistance with mixed domestic data and slightly softer US labor trends. A breakout above 1.3400 requires stronger UK macro momentum or further USD softness.

• XAU/USD Price: Gold drifts lower in Asian trading, trimming part of Thursday’s strong rally and breaking a three-day winning streak from the $4,285 region. Momentum has cooled slightly after reaching the highest level since late October.
• China Data: China’s upcoming macro releases are expected to show weak consumption, soft housing activity, and continued price declines. However, industrial production should remain supported by strong export performance, offering mixed signals for global risk appetite.
• Ukraine Talks: Geopolitical tension persists as Ukraine’s revised 20-point framework faces hurdles, especially regarding territorial concessions. The US floated ideas such as a Donbas economic zone and joint management of the Zaporizhzhia nuclear plant, keeping risk premiums elevated.
• Disney Deal: OpenAI and Disney announced a $1bn partnership allowing Sora users to generate videos with over 200 Disney-owned characters. The deal boosts tech-sector sentiment but has limited direct implications for gold, which remains driven by macro and geopolitical factors.
• CPI Focus: Next week’s US CPI, first after the government shutdown, will be key in validating or reversing the post-Fed market bias. With headline inflation last at 3%, still above the 2% target, markets remain cautious on the Fed’s path forward.

Closing statement: Gold holds firm despite a slight pullback, supported by geopolitical risks and uncertainty around US inflation. Near-term direction hinges on next week’s CPI print and evolving macro signals from China.

• Crude Oil Price: WTI trades lower near $57.70 early Friday, extending its pullback as market sentiment remains fragile. The move reflects ongoing supply–demand uncertainty and broader geopolitical pressures.
• Tanker Seizure: The US interception of a sanctioned Venezuelan oil tanker marks a sharp escalation in tensions. The action may significantly hinder Venezuela’s ability to export crude, as shippers grow more reluctant to handle its cargoes.
• US–Ukraine: Comments from the White House suggest rising frustration with both Russia and Ukraine amid stalled negotiations. Reports that Washington pushed Kyiv toward territorial concessions add further geopolitical instability to energy markets.
• NATO Warning: NATO’s Mark Rutte urged members to take the Russian threat more seriously, warning some could be “next targets.” Heightened geopolitical risks continue to support underlying volatility in crude prices.
• Fed Speakers: With no major US data releases scheduled Friday, the USD and commodities will react primarily to FOMC speeches. Their tone may influence short-term positioning across oil markets heading into the weekend.

Closing statement: Oil stays pressured but geopolitics remain an upside tail risk. The market will look for direction from weekend developments and central bank communication.

• DAX Price: Germany’s benchmark index trades higher near 24,400 after a mild pullback from Thursday’s intraday peak. The index remains supported by broad sector gains and improved risk appetite.
• Inflation Rises: German inflation increased to 2.6% in November, confirming preliminary readings. Harmonized consumer prices rose from 2.3% YoY in October, keeping policy expectations steady but cautious.
• Export Weakness: The Kiel Institute projects a 0.2% decline in German exports in 2025, with sharp losses expected in US-bound shipments. Tariff tensions and declining competitiveness continue to weigh on Germany’s trade outlook.
• Broad Gains: Major German companies including Daimler Truck, Merck, Siemens, and Munich RE gained between 1% and 3%. The breadth of the advance signals resilient investor sentiment despite macro headwinds.
• Growth Outlook: Scope Ratings forecasts moderate Eurozone-21 growth of 1.4% next year, following 1.5% this year. Germany is expected to pick up to 1.0% growth, with France and Italy also maintaining modest expansions.

Closing statement: DAX momentum remains constructive, but export softness and inflation normalization may shape the medium-term trend. Focus shifts to incoming data and trade developments.