Daily Analysis 05/12/2025

• GBP/USD Price: GBP/USD edges slightly higher toward 1.3350 in Friday’s European session, maintaining mild upward traction.
• UK Outlook: Concerns about the UK’s economic trajectory and expectations of quicker-than-anticipated BoE rate cuts continue to pose downside risks for the Pound.
• Layoffs Ease: The US Challenger report showed layoffs plunging to 71k from 153k, with AI-related cuts totaling 6.2k.
• Labor Data: US initial jobless claims fell to 191k, while continuing claims dipped to 1.94 million — levels consistent with historically low layoff activity.
• PCE Index: Markets now turn to long-delayed September PCE data, which will finally provide clarity on real consumption and inflation trends following the extended government shutdown.

Closing statement: GBP/USD maintains a cautious bid, but broader direction will hinge on incoming US PCE data and evolving expectations for BoE policy easing.

• XAU/USD Price: XAU/USD struggles to extend its rebound from the $4,175 area and remains range-bound during Friday’s European session.
• Fed Bets: Despite stronger US labor data, markets still assign over an 85% probability to a 25 bps Fed rate cut at next week’s meeting, limiting downside pressure on gold.
• Chip Curbs: US senators introduced the SAFE CHIPS Act, aiming to prevent the easing of restrictions on advanced Nvidia and AMD AI chip sales to China, Russia, Iran, and North Korea for 2.5 years.
• China Talks: French President Emmanuel Macron met with Xi Jinping to discuss trade and geopolitical issues while urging China to support efforts to end the war in Ukraine.
• India Visit: Russia’s President Vladimir Putin began a rare visit to India, with both nations aiming to diversify cooperation and lift bilateral trade to USD 100 billion by 2030.

Closing statement: Gold remains directionless, with its next move likely driven by Fed policy expectations and evolving geopolitical developments across the US, China, and India.

• Crude Oil Price: WTI crude edges lower early Friday in Europe, trading near $59.30 per barrel and easing from Thursday’s close at $59.48.
• Russian Oil: India’s Bharat Petroleum and Indian Oil purchased Russian Urals crude from non-sanctioned suppliers, securing January cargoes outside dealings with Rosneft or Lukoil, per Reuters sources.
• Putin Stance: President Putin rejected key elements of the US peace proposal and reiterated that Ukrainian forces must leave Donbas or Russia will take the region by force.
• US Waiver: The US Treasury granted a narrow sanctions exception allowing transactions with Lukoil-branded gas stations outside Russia until April 29, 2026, signaling practical limits of the sanctions regime.
• Arctic Reopens: US Congress overturned a Biden-era restriction on leasing parts of the Arctic National Wildlife Refuge’s Coastal Plain for oil and gas, expanding potential future drilling opportunities.

Closing statement: WTI remains pressured by geopolitical uncertainty, shifting sanctions dynamics, and evolving US energy policy, while demand signals remain secondary to headline-driven volatility.

• DAX Price: The DAX extends its gains for a fourth consecutive session on Friday, reflecting improved sentiment across global equity markets.
• Orders Numbers: German industrial orders rose 1.5% in October, beating expectations of 0.4%, with September data also revised higher, signaling stabilizing manufacturing momentum.
• Weak Recovery: The German Economic Institute (IW) projects only modest GDP growth of 0.1% this year and 0.9% in 2026, citing slow exports and weaker global trade as persistent headwinds.
• ECB Patience: ECB Chief Economist Philip Lane emphasized that the bank should not overreact to temporary deviations from its 2% inflation target, reinforcing expectations of policy stability.
• GDP Numbers: Markets await Eurostat’s revised Q3 GDP release, with the initial estimate showing a 0.2% quarterly expansion following 0.1% growth previously.

Closing statement: The DAX remains supported by stronger-than-expected industrial data and calmer ECB policy signals, though Germany’s tepid growth outlook may cap upside momentum.