IC Markets – Europe Fundamental Forecast | 30 July 2026

IC Markets – Europe Fundamental Forecast | 30 July 2026

What happened in the Asia session?

During Thursday’s Asia session, trading was relatively cautious as investors digested the Federal Reserve’s decision to leave interest rates unchanged overnight while awaiting several major European and U.S. data releases later in the day, including the Bank of England policy decision, U.S. Q2 GDP, and Core PCE inflation. The biggest regional development came from Japan, where attention centered on inflation ahead of the Tokyo CPI release due later in the session (forecast: 1.8% y/y, up from 1.6% previously). Market participants also continued to assess growing expectations that the Bank of Japan could eventually adopt a more hawkish policy stance after recent inflation and wage developments, although no new monetary policy action was announced during the session.

What does it mean for the Europe & US sessions?

Traders are entering one of the busiest macroeconomic days of the month. The spotlight will be on the Bank of England’s monetary policy decision, Germany’s preliminary GDP and CPI data, and a major batch of U.S. economic releases, including Advance Q2 GDP, Core PCE inflation, and weekly jobless claims. These releases come just hours after the Federal Reserve kept interest rates unchanged at 3.50%–3.75%, meaning markets will closely assess whether incoming data support the Fed’s cautious stance or shift expectations for future policy moves.
​
The Dollar Index (DXY)

Key news events today

Advance GDP q/q (12:30 pm GMT)

Core PCE Price Index m/m (12:30 pm GMT)

Advance GDP Price Index q/q (12:30 pm GMT)

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

The U.S. dollar is trading with a firm but cautious tone after the Federal Reserve kept interest rates unchanged at 3.50%–3.75% while maintaining a hawkish stance on inflation. Markets are now focused on today’s key U.S. economic releases, including Q2 Advance GDP, Core PCE inflation, GDP Price Index, and weekly Initial Jobless Claims (shown on your economic calendar)—which are expected to provide the next major catalyst for the dollar. Consensus forecasts point to 2.1% annualized GDP growth, 0.2% monthly Core PCE, a 4.1% GDP Price Index, and 201,000 jobless claims.

Central Bank Notes:

• The Federal Open Market Committee (FOMC) kept the federal funds rate unchanged at 3.50%–3.75% at its July 28–29, 2026, meeting, marking the fifth consecutive meeting without a policy change. The Committee voted 9–3 to maintain rates, with three members dissenting in favor of a 25-basis-point rate hike, highlighting growing concern among some policymakers that inflation remains too high.
• The Committee reaffirmed its dual mandate of maximum employment and price stability. Officials noted that the labor market remains resilient, with job gains broadly keeping pace with labor force growth and the unemployment rate remaining relatively stable. The FOMC continues to view employment conditions as consistent with a healthy economy while remaining vigilant for signs of labor market weakening.
• Inflation remains the Committee’s primary concern. While some recent inflation data have shown moderation, overall price pressures remain above the Fed’s 2% target. Policymakers emphasized that elevated inflation continues to be driven in part by higher energy prices and persistent supply-side pressures, leading the Committee to maintain a restrictive monetary policy stance.
• Economic activity continues to expand at a solid pace despite elevated uncertainty. Strong productivity growth, business investment, and continued spending related to artificial intelligence remain supportive of economic growth. However, the FOMC acknowledged that geopolitical tensions, particularly developments affecting global energy markets, continue to pose risks to both inflation and the broader economic outlook.
• The July meeting highlighted increasing divisions within the Committee. Three policymakers—Beth Hammack, Neel Kashkari, and Lorie Logan—voted against the majority, preferring an immediate rate increase. This unusually large number of dissents reflects growing concern among some officials that inflation could remain persistent and may require additional policy tightening if progress stalls.
• Chair Kevin Warsh reiterated that future policy decisions will remain strictly data-dependent. He avoided providing explicit forward guidance, emphasizing that upcoming decisions will depend on incoming inflation, employment, and growth data. Warsh also stressed that the Committee remains fully committed to returning inflation to its 2% objective and is prepared to act if inflationary pressures intensify.
• The FOMC continues its balance sheet normalization program without changes. The Federal Reserve will maintain Treasury runoff caps at $5 billion per month and agency mortgage-backed securities (MBS) runoff caps at $35 billion per month, while continuing to ensure ample reserves remain available within the banking system.
• The next meeting is scheduled for 15 to 16  September 2026.

Next 24 Hours Bias
Weak Bearish

Gold (XAU)

Key news events today

Advance GDP q/q (12:30 pm GMT)

Core PCE Price Index m/m (12:30 pm GMT)

Advance GDP Price Index q/q (12:30 pm GMT)

Unemployment Claims (12:30 pm GMT)

What can we expect from Gold today?

Gold (XAU/USD) is trading with a slightly bullish but cautious tone on Thursday, 30 July 2026, as investors digest the Federal Reserve’s decision to keep interest rates unchanged while awaiting several high-impact economic releases later today. The Fed’s policy pause initially weakened the U.S. dollar and Treasury yields, providing support for gold, although Fed Chair Kevin Warsh reiterated that inflation remains a priority and did not signal an imminent shift toward easier monetary policy. Markets have since reduced expectations for another rate hike at the September meeting, which has helped gold stabilize above the psychologically important $4,000/oz level.

Next 24 Hours Bias   
Weak Bullish

The Euro (EUR)

Key news events today

German Prelim CPI m/m (All Day)

German Prelim GDP q/q (8:00 am GMT)

What can we expect from EUR today?

The euro is likely to remain one of the most active currencies today, as markets focus on Germany’s preliminary Q2 GDP and preliminary July CPI inflation, both of which are key indicators for the European Central Bank’s (ECB) next policy decision. According to your economic calendar, German Preliminary GDP q/q is expected to slow to 0.1% from 0.3%, while Preliminary CPI m/m is forecast to rebound by 0.7% after a 0.3% decline previously. Stronger-than-expected inflation combined with resilient GDP would likely support the euro by reinforcing expectations that the ECB could resume tightening later this year, while weaker figures would increase concerns over slowing growth and could pressure the currency.

Central Bank Notes:

• The Governing Council kept all three key interest rates unchanged at its 22–23 July meeting, maintaining the deposit facility at 2.25%, the main refinancing operations rate at 2.40%, and the marginal lending facility at 2.65%. The ECB reiterated that monetary policy will remain meeting-by-meeting and data-dependent, with no pre-commitment to a future rate path.
• The euro area economy continues to expand at a modest pace, with growth expected to remain below trend but resilient. While domestic demand and the labor market continue to provide support, elevated uncertainty, higher energy prices, and weaker external demand are expected to limit the pace of expansion through the second half of 2026.
• Balance-sheet normalization continues as planned. The APP and PEPP portfolios continue to decline predictably as the Eurosystem no longer reinvests maturing securities. The ECB has indicated that liquidity conditions remain orderly and that it stands ready to preserve the smooth transmission of monetary policy if necessary.
• Inflation risks remain tilted to the upside. Renewed volatility in oil and natural gas prices following geopolitical tensions in the Middle East could keep headline inflation above the ECB’s 2% target for longer. Policymakers are closely monitoring the persistence of energy-driven inflation, wage developments, and any potential second-round effects.
• The ECB is expected to maintain a cautious policy stance into August. Future policy decisions will continue to depend on incoming inflation data, wage growth, underlying inflation measures, credit conditions, and the effectiveness of monetary policy transmission. While markets see the possibility of further tightening later in the year if inflation remains persistent, the ECB has not committed to additional rate increases.
• For the euro (EUR), the outlook remains balanced. Stable ECB policy provides support, but renewed energy-price shocks and global risk sentiment may generate two-way volatility. The euro could strengthen if euro-area inflation remains sticky or economic data outperform expectations, while weaker growth or a more hawkish Federal Reserve could weigh on the currency.
• Euro-area bond markets are expected to remain sensitive to inflation expectations and geopolitical developments. Front-end yields should remain relatively anchored while the ECB stays on hold, whereas longer-dated yields will continue to respond to energy-price developments, inflation expectations, and global risk sentiment.

​The next meeting is on 9 to 10 September 2026

Next 24 Hours Bias
Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news event

What can we expect from CHF today?

The Swiss franc (CHF) is trading with a mildly bearish bias as investors shift their attention from traditional safe-haven currencies toward the U.S. dollar ahead of today’s key U.S. macroeconomic releases, including Advance Q2 GDP, Core PCE inflation, and weekly jobless claims. The Federal Reserve’s decision to leave interest rates unchanged while maintaining a hawkish tone has reinforced expectations that U.S. rates could remain elevated for longer, supporting the dollar and reducing demand for the franc. Meanwhile, the Swiss National Bank’s accommodative stance, with its policy rate at 0.00% and expectations that it will remain there through the rest of 2026, continues to limit CHF upside.

Central Bank Notes:

• At its monetary policy assessment on 18 June 2026, the Swiss National Bank left the SNB policy rate unchanged at 0.00%, in line with market expectations. Policymakers maintained that the current policy setting remains appropriate given low inflation and ongoing global economic uncertainty.
• Inflation remains exceptionally subdued in Switzerland. Recent data show consumer price growth staying comfortably within the SNB’s price stability range, with headline inflation around 0.6% year-on-year in May 2026, while underlying inflation pressures remain limited despite higher global energy prices.
• The SNB continues to view medium-term inflation pressures as largely unchanged. While energy prices linked to Middle East tensions have temporarily lifted near-term inflation expectations, the stronger Swiss franc has helped offset imported inflation, supporting the central bank’s decision to maintain rates at current levels.
• External risks remain elevated. Policymakers highlighted ongoing geopolitical tensions, trade uncertainties, and slower global growth prospects, particularly in key export markets such as the Eurozone and the United States. These factors continue to warrant a cautious policy approach.
• Swiss economic activity remains resilient but modest. GDP growth is expected to remain around 1–1.5% in 2026, supported by domestic demand, although manufacturing and export-oriented sectors continue to face challenges from a strong franc and softer foreign demand.
• The SNB reiterated its readiness to act if necessary. The Governing Board emphasized that it remains willing to intervene in foreign exchange markets to counter excessive Swiss franc appreciation and stands prepared to adjust policy should inflation or economic conditions deviate materially from expectations.

The next meeting is on 24 September 2026.

Next 24 Hours Bias
Weak Bullish

The Pound (GBP)

Key news events today

BOE Monetary Policy Report (11:00 am GMT)

Monetary Policy Summary (11:00 am GMT)

MPC Official Bank Rate Votes (11:00 am GMT)

Official Bank Rate (11:00 am GMT)

BOE Gov Bailey Speaks (11:30 am GMT)

What can we expect from GBP today?

The British pound is expected to experience heightened volatility today, as markets focus almost entirely on the Bank of England’s (BoE) monetary policy decision, Monetary Policy Report, MPC voting breakdown, and Governor Andrew Bailey’s remarks. According to your economic calendar, the market expects the Official Bank Rate to remain unchanged at 3.75%, with another 7-2 vote in favor of holding rates steady. Investors will closely examine the BoE’s guidance on inflation, economic growth, and whether policymakers still see the possibility of future rate hikes later this year.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) met on 17–18 June 2026 and voted 7–2 to maintain the Bank Rate at 3.75%. Two members, Megan Greene and Chief Economist Huw Pill, voted for a 25-basis-point increase to 4.00%, citing concerns about inflation expectations and the risk of persistent price pressures. The majority favored keeping policy unchanged while assessing the evolving impact of recent energy-market developments.
• Quantitative tightening (QT) continues as planned, with the Bank maintaining its balance-sheet reduction strategy through gilt runoff and sales. The MPC considers QT an important part of policy normalization while preserving sufficient liquidity in financial markets.
• Inflation remains above target despite some easing in energy prices. The Bank expects CPI inflation to remain around or above 3% during the second half of 2026, compared with the 2% target. While recent declines in oil and gas prices have reduced the near-term inflation outlook, policymakers remain concerned about potential second-round effects through wages and services inflation.
• UK economic growth remains subdued. The MPC noted signs of weakening demand, falling vacancies, and a softer labor market, although recent wage growth data came in slightly stronger than expected. The Committee expects economic activity to remain modest as higher borrowing costs and uncertainty continue to weigh on business investment and consumer spending.
• Global risks remain elevated, particularly due to developments in the Middle East and their potential effects on energy markets, trade flows, and financial conditions. Although tensions have eased somewhat following diplomatic progress, policymakers continue to monitor commodity-price volatility and its implications for UK inflation.
• Inflation risks remain tilted to the upside. The MPC highlighted concerns that higher inflation expectations, resilient wage growth, and renewed energy-price shocks could require a more restrictive policy stance. However, downside risks from weaker growth and increasing economic slack offset this influence.
• The MPC continues to emphasize a data-dependent and restrictive policy stance, with no commitment to either rate cuts or hikes in the near term. Governor Andrew Bailey stated that policymakers will remain vigilant and stand ready to respond if inflation proves more persistent than expected. The presence of two votes for a rate increase demonstrates that the Committee remains alert to upside inflation risks.
• The next meeting is on 30 July 2026.
  
  Next 24 Hours Bias
  Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news event

What can we expect from CAD today?

The Canadian dollar is trading with a modest bullish bias on Thursday, benefiting from firmer oil prices and the Federal Reserve’s decision to keep interest rates unchanged. Nevertheless, upside momentum remains limited as the U.S. dollar steadies and Treasury yields stay elevated following the Fed’s hawkish hold. Meanwhile, the Bank of Canada continues to strike a cautious tone, with its latest meeting minutes revealing differing views among policymakers over the strength of Canada’s economic recovery.
​
Central Bank Notes:

• At its 15 July 2026 meeting, the Governing Council maintained the overnight rate target at 2.25%, marking a sixth consecutive decision at this level and extending the policy pause that began in late 2025. The decision was in line with market expectations. It reflects the Council’s view that the current stance remains appropriately restrictive to return inflation sustainably to the 2% target over the projection horizon while balancing two‑sided risks.
• External conditions remain challenging, with persistent geopolitical tensions in the Middle East and ongoing U.S. trade frictions continuing to weigh on global sentiment and supply chains. Council minutes and external commentary highlight that these risks are asymmetric, with the potential either to slow foreign demand or to heighten volatility in global energy and other commodity prices, warranting a nimble policy stance.
• Real GDP appears to have resumed growth in Q2 2026 after stalling earlier in the year, with the Bank and private forecasters now expecting output to expand at roughly a 2.3–2.5% annualized pace, slightly above the April baseline. Growth remains supported by resource shipments and exports amid robust global energy demand, while domestic activity is gradually broadening as consumption and housing stabilize and business investment shows tentative improvement from earlier weakness.
• The labour market remains tight but continues a gradual rebalancing: employment rose by about 18,000 positions in June, and the unemployment rate edged down to 6.5%, tying its lowest level since mid‑2024. Wage growth has cooled from prior peaks, and regional participation increases are consistent with easing wage pressures over time, although pockets of labour scarcity persist in energy‑related and some service sectors.
• Headline CPI has drifted above 2% and was around 3.2% year‑over‑year in May, with inflation expected to remain elevated in June before gradually easing as energy effects fade. Core measures have moved closer to 2% on average, and the share of CPI components running above 3% has fallen back toward historical norms, suggesting underlying inflation is moderating even as near‑term headline readings remain somewhat higher. The Bank continues to project inflation returning to the 2% target in early 2027, conditional on oil prices stabilizing near their assumed range.
• High‑frequency indicators point to continued expansion in manufacturing and exports into early summer, with Purchasing Managers’ Index readings still in positive territory, supported by solid energy‑sector activity and demand for intermediate goods. However, surveys indicate that firms’ capex intentions remain cautious in light of trade uncertainty and past weakness in domestic demand, suggesting investment may recover only gradually.
• Credit growth remains moderate, and bank lending spreads and deposit pricing show limited additional pass‑through from recent global rate moves, keeping domestic financial conditions relatively stable. Mortgage rates remain somewhat elevated compared with pre‑tightening levels but have been broadly unchanged in recent months, contributing to a measured moderation in housing activity rather than an abrupt adjustment.
• The next meeting is on 2 September 2026.

Next 24 Hours Bias
Weak Bearish

Oil

Key news events today

No major news event

What can we expect from Oil today?

Oil prices are trading with heightened volatility after giving back part of Wednesday’s sharp rally. The market remains primarily driven by Middle East geopolitical developments, with traders closely monitoring supply disruptions around the Strait of Hormuz and the Red Sea. Although tensions remain elevated following recent U.S. and Saudi military actions against Iran-backed forces, crude prices eased as markets observed that Gulf oil exports have continued to flow through alternative routes, limiting immediate physical supply shortages. Brent crude slipped back below $90 per barrel, while WTI traded near $84 per barrel, as investors balanced geopolitical risk against evidence that global supply has not been severely interrupted.

Next 24 Hours Bias
Strong Bullish