Daily Analysis 24/04/2025

• GBP/USD Price: The British Pound regains traction, lifting GBP/USD to around 1.3270 in early European trading on Thursday, snapping a two-day decline as sentiment stabilizes ahead of key US data.
• Technical Outlook: The pair maintains a constructive technical outlook, trading above the 100-day Exponential Moving Average, which acts as a strong dynamic support, bolstering buyer confidence.
• BoE Rate Cut: Markets are pricing in an 82% probability of a Bank of England rate cut next month, as Trump’s trade policies weigh on global growth, influencing monetary policy expectations (LSEG data).
• Mixed Signals: While Trump initially expressed optimism about lowering tariffs on China, his latest comments place the onus on Beijing to re-engage, injecting uncertainty back into markets.
• US Data: Market participants now await US Initial Jobless Claims, Durable Goods Orders, the Chicago Fed Index, and Existing Home Sales, which could influence USD direction and GBP/USD momentum.

Closing statement: GBP/USD is supported by both technicals and relative USD softness, but faces event risk from US data and ongoing trade rhetoric. The outlook remains cautiously bullish, contingent on how incoming data shapes Fed and BoE expectations.

• XAU/USD Price: Gold prices are back in positive territory as waning optimism over US-China trade progress lifts demand for safe-haven assets. XAU/USD gains traction following a two-day pullback.
• USD Weakening: The US Dollar’s recovery fades amid growing market expectations that the Federal Reserve will cut rates as early as June, with three total rate cuts projected this year, enhancing gold’s appeal.
• Tariff Uncertainty: Trump’s administration revealed it has spoken to 90 countries about tariffs, signaling global trade volatility. Talks with China are also ongoing.
• Japan Talks: Citing multiple government sources, the NHK broadcaster reported late Wednesday that the US told Japan that it cannot give Japan special treatment regarding tariffs during talks held earlier this month.
• US PMI Data: The S&P Global Composite PMI dropped to 51.2 in April, a 16-month low, raising alarms over slowing US growth and reinforcing gold’s safe-haven status amid recessionary signals.

Closing statement: Gold remains supported by a softening dollar, rising recession fears, and trade war anxiety. As Fed rate cut expectations deepen and risk sentiment weakens, XAU/USD maintains a bullish bias in the short term.

• Crude Oil Price: West Texas Intermediate (WTI) crude has rebounded to $62.40 during Thursday’s Asian session, retracing part of its 2% drop from Wednesday, as traders digest shifting OPEC+ dynamics and geopolitical cues.
• OPEC+ Production: A Reuters report suggests that several OPEC+ nations may push to raise output in June, weighing on sentiment. Kazakhstan's refusal to cut production, citing national interests, adds to fears of supply-side loosening.
• Auto Tariffs: President Trump warned of a potential increase in the 25% tariff on Canadian car imports, signaling a broader strategy to protect domestic manufacturing—a move that could strain North American trade relations and indirectly influence energy demand.
• Chinal Trade Stance: President Xi Jinping reaffirmed China’s commitment to international trade cooperation, hosting Kenya’s President Ruto as part of its geopolitical pivot, while resisting Trump’s tariff pressure, reinforcing a fragmented global trade landscape.
• Iran Talks: Investors are eyeing upcoming US-Iran talks, with any breakthrough on nuclear enrichment curbs likely to increase Iranian oil supply, potentially weighing further on global oil prices in the near term.

Closing statement: While WTI shows signs of short-term resilience, lingering OPEC+ production risks, tariff-driven trade tensions, and geopolitical shifts could cap upside potential. Market attention is now firmly on US-Iran negotiations for the next directional cue.

• DAX Price: Germany’s benchmark DAX index closed 3.1% higher at 21,961.97 on Wednesday, reflecting strong market sentiment and relief from a temporary pause in tariff headlines, pushing the index toward new highs.
• ECB Easing Bets: MUFG expects the European Central Bank (ECB) to resume rate cuts in June, citing persistent disinflationary forces that warrant a faster return to neutral monetary policy, adding momentum to equity markets.
• Japan G7: Japanese Finance Minister Katsunobu Kato called recent US tariffs “highly disappointing” during the G7, underscoring concerns about free trade and volatility in foreign exchange markets. His comments echo broader global unease over Washington’s trade actions.
• IMF Spring Meeting: The IMF Spring Meetings are underway, with attention on the US-led trade war and global economic outlook. Key speakers, including IMF’s Kristalina Georgieva, Germany’s Jörg Kukies, and Bundesbank’s Joachim Nagel, are expected to shape sentiment with policy signals.
• Ifo Index: Markets await the Ifo Business Climate Index, Germany’s top early indicator, after three consecutive months of improvement. A continued rise could reinforce the view that German corporate confidence remains resilient despite global headwinds.

Closing statement: With a broad equity rally, growing ECB dovish expectations, and global policy commentary in focus, the DAX could remain buoyant in the near term. However, upcoming data and IMF meeting takeaways will be crucial in validating this momentum.