Daily Analysis 02/09/2025

• GBP/USD Price: The British Pound trades lower near 1.3520 on Tuesday, giving back part of Monday’s recovery as traders weigh UK growth concerns against Fed commentary.
• Monetary Policy: Markets expect the Bank of England to hold rates unchanged at the September 18 meeting, but forward pricing suggests around 25 bps of easing by March 2026. This reflects persistent inflation concerns but a weakening growth backdrop.
• Manufacturing Numbers: The UK S&P Global Manufacturing PMI fell to 47.0 in August, below expectations of 47.3. This marked the 11th consecutive month of contraction, underscoring the ongoing industrial downturn.
• Housing Data: Nationwide housing prices slipped 0.1% in August, while mortgage approvals rose to 65.35K in July. The BoE’s M4 money supply expanded slightly (+0.1%), offering mixed signals on domestic credit and consumer demand.
• FOMC News: Fed Chair Jerome Powell and other FOMC members flagged growing risks in the US labor market, keeping September’s meeting pivotal for the rate path. This cautious tone limits USD downside, adding pressure on GBP/USD.

Closing statement: GBP/USD is under pressure as UK data continues to highlight industrial weakness, while BoE policy expectations remain cautious. The pair’s next direction hinges on incoming US labor reports and central bank guidance.

• XAU/USD Price: Gold trades near $3,485/oz, easing slightly after a strong start to the week but still maintaining a firm bullish tone amid ongoing macro and political uncertainty.
• Fed Expectations: Dovish Fed rate-cut expectations are strengthening, with investors increasingly focused on labor market risks exacerbated by tariffs imposed by President Trump. This continues to underpin demand for non-yielding assets like gold.
• Legal on Tariffs: A 7–4 US Court of Appeals decision cast doubt on Trump’s unilateral tariff authority, stating that such power primarily rests with Congress. This ruling has injected legal and political uncertainty, boosting gold’s safe-haven appeal.
• Fed Governance: The court hearing on Trump’s attempt to remove Fed Governor Lisa Cook ended without a ruling. Judge Jia Cobb requested additional briefs, delaying the decision and sustaining uncertainty around Fed independence.
• Upcoming Data: Traders are eyeing ISM Manufacturing PMI (Tuesday) and ISM Services PMI (Thursday) for signs of US economic resilience, alongside Fed officials’ speeches which may sharpen guidance on the September policy outlook.

Closing statement: Gold remains supported by dovish Fed bets, legal uncertainty over tariffs, and political pressure on the Fed. Near term, the focus shifts to US data and Fed commentary, which could decide whether XAU/USD extends gains or consolidates.

• Crude Oil Price: WTI trades at $64.60/bbl, advancing modestly in early European hours on Tuesday after Monday’s close at $64.42, signaling steady upward momentum.
• US Policy: The Trump administration eased sanctions on Venezuela’s oil sector, granting Chevron an OFAC license to expand operations. This marks a cautious recalibration of US energy policy and could bring incremental supply to global markets.
• Iran Sanctions: The UK, France, and Germany triggered the “snapback” mechanism to restore pre-deal sanctions on Iran, a move that could reduce future Iranian oil supply and tighten global balances.
• India’s Stance: India continues to buy discounted Russian crude, trimming purchases only modestly despite US pressure. Growth priorities and domestic politics appear to outweigh geopolitical concerns.
• BRICS Dynamics: A late-August meeting between Modi and Xi signaled stronger BRICS alignment, suggesting coordinated energy strategies that may counterbalance Western sanctions, particularly in the oil trade.

Closing statement: Crude oil sits at a crossroads of policy shifts, sanctions risks, and shifting geopolitical alliances. While Venezuela’s potential supply return is price-dampening, renewed Iran sanctions and BRICS coordination provide upside risks.

• DAX Price: The DAX continues to battle around the 24,000-point psychological barrier, a level that has acted as a magnet in recent sessions. The sideways action highlights investor hesitation as they await stronger catalysts.
• Eurozone PMI: Eurozone PMI data showed manufacturing expansion returning in Italy and France, though Germany slipped slightly below 50. This mixed picture provided modest support for European equities on Monday.
• ECB Commentary: ECB board member Isabel Schnabel noted that rates are already mildly accommodative and pushed back against further cuts. This underscores the ECB’s preference for stability, potentially limiting monetary policy support for stocks.
• US Market: With US markets reopening after Labor Day, Trump’s upcoming Oval Office announcement could introduce volatility. Topics may range from tariffs to Fed policy, keeping global risk appetite cautious.
• US Data: The week ahead is packed with US data releases – JOLTs, ADP, jobless claims, ISM Services PMI, and Jobs Report – all of which could sway sentiment in global equity markets, including the DAX.

Closing statement: The DAX remains in a consolidation phase near 24,000, with direction likely influenced by US macro data and Trump’s policy remarks. A sustained break above resistance would require stronger European growth signals or external risk-on drivers.