Daily Analysis 02/04/2026

• GBP/USD Price: The GBP/USD retreats from the 1.3345 area and trades near 1.3210 during the European session. The move reflects renewed selling pressure and a stronger US Dollar tone.
• BoE signals: Signals from the Bank of England about a potential rate hike as early as April highlight rising inflation concerns. However, tighter policy expectations may weigh on economic growth, limiting upside for the pound.
• Geopolitical news: Reports of the United Arab Emirates pushing for military action to reopen the Strait of Hormuz are increasing tensions in the Middle East. This risk-off environment tends to favor the US Dollar over GBP.
• Fed's Schmid: Kansas City's Schmid warned that rising energy prices could have a lasting impact on inflation, already near 3% before the Iran war.
• Trade policy: Planned tariff adjustments by Donald Trump, particularly on steel and aluminum, introduce additional uncertainty. Such measures could impact global trade flows and currency dynamics.

Closing statement: GBP/USD remains under pressure as USD strength, geopolitical tensions, and hawkish central bank signals outweigh support from UK rate expectations.

• XAU/USD Price: The XAU/USD turned lower after hitting the $4,800 level, snapping a four-day winning streak. The pullback is mainly driven by renewed strength in the US Dollar.
• Fed's Musalem: Comments from Fed's Musalem suggest interest rates may remain elevated for some time, with flexibility to either hike or cut depending on inflation dynamics. This stance from the Federal Reserve is typically bearish for non-yielding assets like gold.
• Labor market: The ADP Employment report surprised to the upside, indicating continued resilience in the US labor market. Strong employment data supports the USD and reduces immediate pressure on the Fed to ease policy.
• Manufacturing activity: ISM Manufacturing data came in above expectations, while the Prices Paid component surged significantly. This signals persistent inflationary pressures, reinforcing expectations of tighter monetary policy.
• Financial monitoring: The United States Department of the Treasury confirmed plans to meet with regulators regarding developments in private credit markets. This reflects broader concerns about financial system risks amid tighter conditions.

Closing statement: Gold faces downside pressure as strong US data and hawkish Fed signals boost the Dollar, offsetting recent bullish momentum.

• Crude Oil Price: The WTI Crude Oil surged toward the $100 mark, supported by renewed geopolitical tensions following updates from Donald Trump on the Iran conflict. Escalation fears continue to drive a strong risk premium in oil markets.
• Iran's message: Statements from Iran’s leadership emphasize resilience and warn of broader consequences from attacks on infrastructure. This reinforces the perception of prolonged instability, keeping supply disruption risks elevated.
• Venezuelan supply: Exports from Venezuela have climbed above 1 million barrels per day, while interest from major players like Chevron and Shell signals potential further supply growth. Historically, rising Venezuelan output has helped ease global supply tightness and limit price spikes.
• Infrastructure disruptons: Temporary outages on major transport systems like the Colonial Pipeline highlight the fragility of energy logistics. Even short-term disruptions can amplify price swings in already tight markets.
• Market balances: Oil markets remain caught between strong geopolitical risk (bullish) and increasing non-OPEC supply (bearish). This tug-of-war explains the sharp volatility and inability to decisively break higher.

Closing statement: WTI remains elevated and volatile, with geopolitical tensions providing strong support, while rising global supply, especially from Venezuela, acts as a limiting factor on further upside.

• DAX 40 Price: The DAX 40 surged 2.7% to 23,298 points on optimism around a potential resolution in the Iran conflict, but has since reversed a large portion of those gains, now trading near 22,845. This highlights the fragile and sentiment-driven nature of the current market.
• Manufacturing data: Germany’s manufacturing PMI remains above the key 50 threshold for a second consecutive month, signaling continued expansion. This provides a positive underlying signal for the economy despite global uncertainty.
• Business confidence: Despite improved current activity, German manufacturers have become significantly less optimistic about future growth. This divergence suggests that forward-looking risks—especially geopolitical—are weighing on sentiment.
• ECB's Müller: Comments from Madis Müller indicate that interest rates may rise in the coming quarters, with skepticism about inflation forecasts. A more hawkish stance from the European Central Bank could pressure equities by tightening financial conditions.
• Fed's Barkin: Thomas Barkin noted that firms and consumers are not behaving as if the oil shock will have lasting effects. This suggests markets may still be underestimating longer-term risks or expecting stabilization.

Closing statement: The DAX 40 is showing heightened volatility, with optimism quickly fading amid geopolitical uncertainty, while stronger manufacturing data is offset by weakening confidence and rising rate expectations.