IC Markets – Asia Fundamental Forecast | 15 April 2026
What happened in the U.S. session?
Upbeat U.S. equity earnings and renewed commentary from senior U.S. officials suggesting that core inflation is cooling and leaving room for further Fed rate cuts, which helped sustain a moderately risk‑on tone. Strong first‑quarter profit beats from major banks such as JPMorgan and ongoing commentary from Treasury Secretary Scott Bessent indicate confidence that core inflation could continue to fall. At the same time, Wells Fargo’s weaker interest‑income print weighed on its shares.
What does it mean for the Asia Session?
Escalating US-Iran tensions, particularly around the Strait of Hormuz, where recent US threats of blockades and collapsed ceasefire talks have spiked oil prices and fueled volatility in commodities like WTI crude and copper, as well as safe-haven demand for gold and JPY pairs. Central bank decisions remain pivotal, with the Bank of Korea expected to hold rates steady amid war-related economic risks, while Japan’s producer prices rose 2.6% recently, signaling persistent inflation pressures that could influence BOJ policy signals.
The Dollar Index (DXY)
Key news events today
Empire State Manufacturing Index (12:30 pm GMT)
What can we expect from DXY today?
The US dollar stabilized near 98.38 after volatility driven by US-Iran developments, including a Hormuz blockade and hints of renewed talks from President Trump, which tempered safe-haven flows despite oil rallies. While the euro gained modestly to $1.1761 and risk sentiment improved slightly, underlying dollar strength persists from elevated US yields, sticky inflation, and policy divergences with other central banks, keeping it range-bound but supported amid geopolitical uncertainty.
Central Bank Notes:
- The Federal Open Market Committee (FOMC) is widely expected to hold the federal funds rate target range steady at 3.50%–3.75% at its March 17–18, 2026, meeting, amid rising oil prices from the US-Israel war against Iran and persistent inflation pressures, delaying any 2026 cuts potentially to September.
- The Committee continues to pursue maximum employment and 2% inflation goals, with the labor market weakening further as nonfarm payrolls declined by 92,000 in February 2026 and the unemployment rate rose to 4.4% from 4.3% in January.
- Officials face tilted risks from geopolitical tensions, elevated oil prices, and sticky inflation, with CPI steady at 2.4% year-over-year in February 2026, headline PCE at 2.8% in January, and core PCE rising to 3.1%.
- Economic activity has cooled after robust Q4 2025 growth near 5%, with the Atlanta Fed GDPNow now estimating Q1 2026 growth at around 2.1%–2.7% amid softer consumer spending and labor data.
- December 2025’s Summary of Economic Projections forecasts 2025 unemployment at a median of 4.5%, 2026 GDP growth at 2.3%, and core PCE at 2.5%, with the dot plot signaling one more cut in 2026 to a median 3.4% funds rate; March updates may reflect softer labor and inflation upticks.
- The Committee maintains its data-dependent stance amid a softening labor market, inflation above target, and new oil shocks, likely holding rates at 3.50%-3.75% with ongoing divisions and possible hawkish dissents on rate cuts.
- The FOMC continues its adjusted quantitative tightening, with Treasury rolloff caps at $5 billion per month and agency MBS at $35 billion per month to ensure ample reserves post-2025 program adjustments.
- The next meeting is scheduled for 28 to 29 April 2026.
Next 24 Hours Bias
Medium Bearish
Gold (XAU)
Key news events today
Empire State Manufacturing Index (12:30 pm GMT)
What can we expect from Gold today?
Gold steadied near $4,780 earlier in the week, buoyed by a softer US dollar and expectations of potential Federal Reserve rate adjustments, though it faces headwinds from hawkish policy signals and rising Treasury yields. Central banks continued net purchases, adding 27 tonnes in February alone, with China’s People’s Bank extending its buying streak to 17 months, supporting long-term bullishness.
Next 24 Hours Bias
Weak Bullish
The Australian Dollar (AUD)
Key news events today
No major news event
What can we expect from AUD today?
The Australian Dollar experienced a steady uptick, with AUD/USD nearing 0.7100, driven by de-escalation signals in the Iran tensions, robust commodity flows, and anticipation of local data like employment figures. While global risk appetite provided tailwinds, markets remained cautious ahead of potential US-Iran developments and RBA policy clues, positioning AUD for possible tests of multi-year highs around 0.7190 if positivity persists.
Central Bank Notes:
- The Reserve Bank of Australia (RBA) is expected to hold its cash rate at 3.85% at the March 16-17, 2026 policy meeting, following the widely anticipated 25 basis point hike to 3.85% in early February after persistent inflation pressures from late 2025. While some banks like CBA, NAB, and Westpac now forecast a further 25 basis point rise to 4.10% as soon as May if inflation data remains sticky, consensus tilts toward a pause in March to assess incoming monthly CPI and labor market signals. The February hike reversed prior cuts, entering mildly restrictive territory amid capacity pressures, with the board emphasizing data dependence.
- Inflation remains elevated, with December 2025 CPI at 3.8% year-on-year and trimmed mean at 3.3%, above the 2–3% target midpoint. RBA’s February Statement revised forecasts higher, projecting trimmed-mean inflation to peak in mid-2026 above 3% and remain elevated through early 2027, driven by services, housing, and demand resilience despite some monthly cooling, such as January’s 0.2% MoM gauge. Monthly CPI data continues to highlight core stickiness beyond energy rebates, delaying the target return to late 2027 or beyond.
- January 2026 monthly indicators showed modest easing, but headline CPI risks upward surprises from housing (up recently) and services amid firm domestic demand. Trimmed mean pressures persist from wage growth and capacity constraints, with consumer expectations ticking to 5% YoY in February surveys. Enhanced monthly reporting sharpens vigilance on potential broad-based pick-up.
- The labor market shows softening, with unemployment around 4.1-4.4%, down slightly to 4.1% in December, but unit labor costs are elevated due to subdued productivity. Household spending faces higher borrowing costs post-hike, yet private demand recovery sustains capacity strains. Vulnerabilities persist amid resilient employment dynamics.
- Global growth modestly revised up but tempered by geopolitics and commodity volatility; policy now restrictive post-February, with the RBA balancing inflation against employment risks. Data from the monthly CPI and Q1 GDP will guide, amid household debt sensitivities.
- Sustained restrictive stance post-February anchors inflation return to target, upholding dual mandate with flexibility to new risks like further inflation upticks.
- Markets price a March hold at 3.85%, with big four banks split: CBA, NAB, Westpac eye May hike to 4.10% if persistence continues, while others see limited upside unless acceleration. Upcoming monthly CPI pivotal for Q2 trajectory.
- Policy vigilance counters inflation stickiness against household fragilities and global uncertainties, reaffirming adaptability under dual mandate.
- Base case favors March hold with risks tilted hawkish for further hikes if data is hot; monthly indicators key to 2026 path.
- The next meeting is on 5 to 6 May 2026.
Next 24 Hours Bias
Strong Bullish
The Kiwi Dollar (NZD)
Key news events today
RBNZ Gov Breman Speaks (5:00 pm GMT)
What can we expect from NZD today?
NZD is expected to trade near current levels, with Trading Economics’ models projecting the NZD/USD around 0.57 by the end of the quarter, followed by a gradual recovery toward roughly 0.59 over the next 12 months if the RBNZ can eventually pivot modestly tighter. In short, the New Zealand Dollar today is in a fragile rebound phase: supported by a slightly weaker US Dollar and a modest recovery in risk sentiment, but still constrained by sluggish growth data and a conservative central‑bank stance that limits its upside potential versus major rivals.
Central Bank Notes:
- The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) is widely expected to hold the Official Cash Rate (OCR) steady at 2.25% at its 8 April 2026 Monetary Policy Review, aligning with unanimous market consensus from Reuters polls and previews.
- The MPC continues its data-dependent “wait-and-see” approach after February’s pause, balancing stimulus from prior 325 basis point cuts against inflation’s path back to the 2% target, with readiness for gradual normalization only if recovery strengthens or inflation exceeds forecasts.
- Headline CPI, last at 3.1%, is on track to re-enter the 1-3% band in Q2 2026 and hit 2% by mid-2027, aided by spare capacity, moderating wages, and softer food/fuel prices; two-year business inflation expectations have ticked up slightly to 2.37%.
- Household spending and housing remain subdued amid cautious consumption, low net migration, and labor market softness, though easing retail rates support budgets; high-frequency GDP indicators show steadying momentum in an early recovery phase.
- Accommodative borrowing costs from the low OCR are boosting mortgage approvals and sentiment, but business credit growth lags due to uneven confidence; overall stimulus persists below the 3% neutral rate.
- Risks are balanced, with a favorable global environment—including stronger dairy/meat exports and a softer NZ dollar—offsetting oil shocks and prior China/US trade worries; vigilance remains on second-round inflation effects.
- Forecasts point to potential OCR hikes starting late 2026 (e.g., December) or early 2027 to 2.50% by year-end if activity/inflation firms, but policy stays supportive if recovery unfolds gradually as expected.
- The next meeting is on 27 May 2026.
Next 24 Hours Bias
Medium Bearish
The Japanese Yen (JPY)
Key news events today
No major news event
What can we expect from JPY today?
The Japanese Yen (JPY) has faced ongoing pressure in recent trading sessions, with USD/JPY hovering around 159-160 levels amid uncertainty over the Bank of Japan’s (BoJ) potential rate hike at its April 28 policy meeting and verbal intervention threats from Tokyo officials. As of the latest available data up to April 13, 2026, the pair stood at 159.85, up 0.39% from the prior session, reflecting a broader yearly weakening of about 6% against the dollar, driven by divergent monetary policies and safe-haven USD demand.
Central Bank Notes:
- The Policy Board of the Bank of Japan meets on 18–19 April 2026, with markets anticipating the short-term policy rate to remain at 0.75%, as the bank continues evaluating the December 2025 and prior hikes’ effects amid data-dependent normalization.
- The BOJ will target the uncollateralized overnight call rate around 0.75% and indicate future hikes hinge on impacts to lending, financing, and activity, with Governor Ueda signaling scrutiny of data for potential moves in April or later meetings.
- JGB tapering advances per plan, cutting outright purchases by ¥400 billion quarterly through Q1 2026 and slowing to ¥200 billion from April onward, targeting roughly ¥2-3 trillion monthly by mid-2026, adjustable for market stability
- Japan’s economy maintains moderate growth into Q1 2026, building on the Q4 2025 rebound via exports and fiscal measures, though manufacturing sentiment holds soft amid overseas demand weakness and yen pressures.
- Core CPI (ex-fresh food) likely stays near 2.3-2.5% y/y in early 2026. Tokyo prints off prior highs but above 2%, while core-core hovers around 2.6%, reflecting sustained but easing inflationary forces.
- Input costs ease further from import peaks, yet services inflation, 5% wage targets in shunto talks, and anchored expectations above 2% support price persistence, with upside risks from yen and geopolitics.
- Near-term real GDP may ease below trend due to tightening and external shocks like Iran tensions, but negative real rates, wage gains, and stimulus should underpin consumption and capex rebound.
- Medium-term, overseas recovery, labor shortages, and productivity lifts are set to fuel wages and core inflation near/above 2%, enabling gradual hikes toward 1% if conditions align.
- The next meeting is on 27 to 28 April 2026.
Next 24 Hours Bias
Weak Bearish
Oil
Key news events today
EIA Crude Oil Inventories (2:30 pm GMT)
What can we expect from Oil today?
Oil markets remain highly volatile today, driven by ongoing US-Iran tensions in the Middle East. Crude prices, including WTI near $112 per barrel and Brent around $109-$110, have surged year-to-date by over 75% due to refinery attacks, the Strait of Hormuz blockade threats by President Trump, and disruptions like Iran’s strike on Qatar’s LNG hub, despite IEA stock releases and OPEC production hikes.
Next 24 Hours Bias
Medium Bullish
