IC Markets – Asia Fundamental Forecast | 30 July 2026

IC Markets – Asia Fundamental Forecast | 30 July 2026

What happened in the U.S. session?

The overnight U.S. session was dominated by the Federal Reserve’s decision to keep interest rates unchanged at 3.50%–3.75%, but the unexpectedly hawkish tone highlighted by three policymakers voting for a rate hike kept markets focused on the possibility of tighter monetary policy later this year. U.S. equities declined, Treasury yields rose, the dollar finished mixed after an initial rally, and gold traded with elevated volatility. Oil prices remained one of the strongest-performing assets due to ongoing geopolitical tensions and supply concerns. Attention now shifts to today’s Advance GDP, Core PCE inflation, GDP Price Index, and Weekly Jobless Claims, which are likely to determine the next major move across the U.S. dollar, gold, equity indices, Treasury yields, and crude oil.

What does it mean for the Asia Session?

Thursday is shaping up to be one of the busiest trading days of the week. Asian traders will first react to the Federal Reserve’s guidance before positioning ahead of the Bank of England’s rate decision and a heavy slate of U.S. economic data, including GDP, Core PCE inflation, and jobless claims. These events are likely to drive elevated volatility across the U.S. dollar, pound, euro, gold, oil, and major stock indices. Traders should be cautious around scheduled release times, manage risk appropriately, and monitor both economic data and central bank communication for shifts in market sentiment.
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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 enters Thursday’s session under pressure after the Federal Reserve left interest rates unchanged at 3.50%–3.75%, signaling that while inflation remains elevated, policymakers believe current policy is sufficiently restrictive. Markets interpreted the decision as slightly dovish despite dissent from several officials who favored another rate hike, causing the Dollar Index to weaken and Treasury yields to ease.

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 enters Thursday with bullish momentum after rallying sharply on Wednesday when the Fed held rates steady, aided by a softer U.S. dollar and lower short-term Treasury yields. However, that rally now faces its biggest test of the week as today’s economic releases will shape expectations for the Fed’s next move. The market’s attention now shifts to the U.S. Advance Q2 GDP, Core PCE Price Index (the Fed’s preferred inflation gauge), and Weekly Unemployment Claims, all scheduled for the U.S. session. A stronger-than-expected U.S. GDP or hotter Core PCE reading would likely strengthen the dollar and Treasury yields, putting downward pressure on gold.

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 remains focused on central bank expectations, global risk sentiment, and China-related developments. The AUD has recently faced some pressure after Reserve Bank of Australia (RBA) Governor Michele Bullock’s comments were interpreted as not strongly signalling an immediate rate increase, reducing some of the bullish momentum behind the currency. AUD/USD has been trading near the 0.69–0.70 region, with traders watching whether the pair can regain upside momentum above key resistance levels.

Central Bank Notes:

• The Reserve Bank of New Zealand’s Monetary Policy Committee (MPC) raised the Official Cash Rate (OCR) by 25 basis points to 2.50% at its 8 July 2026 Monetary Policy Review, marking the first rate increase of the current tightening cycle. Unlike the split decision in May, the Committee reached a consensus that reducing monetary stimulus was appropriate to return inflation to target.
• Although global oil prices have fallen following the partial reopening of the Strait of Hormuz, the RBNZ warned that inflation remains above its 1–3% target range and that lingering energy-related cost pressures continue to pose upside risks. The Bank reiterated that further OCR increases are likely, although the timing will remain dependent on incoming economic data.
• The RBNZ now expects headline inflation to have peaked at 3.9% in Q2 2026, lower than the 4.3% peak projected in May, reflecting weaker oil prices. Inflation is forecast to ease to around 3.3% in Q3 2026 before gradually returning to the 2% midpoint by mid-2027, while underlying domestic inflation remains persistent.
• The Committee judged that the current OCR remains accommodative, even after the July increase, and stated that additional tightening will probably be required over coming meetings. Policymakers emphasized that future decisions will depend on inflation expectations, firms’ pricing behaviour, labour market conditions, and the pace of economic recovery rather than following a predetermined path.
• Economic activity slowed during the June quarter as higher energy costs temporarily weighed on demand, but the RBNZ expects the recovery to resume in the September quarter. The Bank’s Kiwi-GDP nowcasting model projects 0.6% quarterly GDP growth in Q3 2026, supported by improving business confidence, lower fuel prices, and stronger household purchasing power as inflation moderates.
• External conditions remained mixed, with elevated global energy price volatility and geopolitical risks supporting upside inflation risks, while softer demand from key trading partners, especially China, continued to weigh on Australian export momentum.
• Financial markets now broadly expect the RBA to hold rates at 4.35% through the third quarter, with the probability of further tightening slightly reduced but still present if services inflation or wage data re-accelerate.
• The July statement emphasized a continued “data-dependent and patient” approach, signaling that policy will remain restrictive for longer if inflation proves persistent, while avoiding any commitment to near-term easing despite slower growth signals.
• The next meeting is on 4 to 5 August 2026.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news event

What can we expect from NZD today?

The New Zealand Dollar (NZD) is trading with a cautious tone today as markets continue to assess the outlook for the Reserve Bank of New Zealand (RBNZ), global risk sentiment, and upcoming US economic data. The Kiwi has recently benefited from expectations of a more hawkish RBNZ stance after the central bank lifted its Official Cash Rate to 2.50%, reinforcing expectations that further tightening could be needed if inflation remains elevated. However, gains have been limited as investors remain cautious due to global uncertainty, weaker risk appetite, and volatility in commodity markets.

Central Bank Notes:

• The Reserve Bank of New Zealand’s Monetary Policy Committee (MPC) raised the Official Cash Rate (OCR) by 25 basis points to 2.50% at its 8 July 2026 Monetary Policy Review, marking the first rate increase of the current tightening cycle. Unlike the split decision in May, the Committee reached a consensus that reducing monetary stimulus was appropriate to return inflation to target.
• Although global oil prices have fallen following the partial reopening of the Strait of Hormuz, the RBNZ warned that inflation remains above its 1–3% target range and that lingering energy-related cost pressures continue to pose upside risks. The Bank reiterated that further OCR increases are likely, although the timing will remain dependent on incoming economic data.
• The RBNZ now expects headline inflation to have peaked at 3.9% in Q2 2026, lower than the 4.3% peak projected in May, reflecting weaker oil prices. Inflation is forecast to ease to around 3.3% in Q3 2026 before gradually returning to the 2% midpoint by mid-2027, while underlying domestic inflation remains persistent.
• The Committee judged that the current OCR remains accommodative, even after the July increase, and stated that additional tightening will probably be required over coming meetings. Policymakers emphasized that future decisions will depend on inflation expectations, firms’ pricing behaviour, labour market conditions, and the pace of economic recovery rather than following a predetermined path.
• Economic activity slowed during the June quarter as higher energy costs temporarily weighed on demand, but the RBNZ expects the recovery to resume in the September quarter. The Bank’s Kiwi-GDP nowcasting model projects 0.6% quarterly GDP growth in Q3 2026, supported by improving business confidence, lower fuel prices, and stronger household purchasing power as inflation moderates.
• Domestic demand remains uneven, with tourism, agriculture, and export industries continuing to outperform, while discretionary retail spending, construction, and housing activity remain subdued. The RBNZ believes spare capacity in the economy should limit widespread pass-through of higher business costs into consumer prices, although this remains an important upside inflation risk.
• Financial conditions have eased since the May meeting as wholesale interest rates declined, and the New Zealand dollar depreciated, helping exporters but potentially adding to imported inflation. The Committee noted that shorter-term mortgage rates had increased earlier in the year, while longer-term borrowing costs have begun to stabilize alongside lower market interest-rate expectations.
• The MPC concluded that maintaining price stability remains its primary objective, stressing that while further rate increases are expected, policy will remain data-dependent. The Committee believes returning inflation to the 2% midpoint is essential to achieving a sustainable recovery in employment, household incomes, and long-term economic growth.
• The next meeting is on 2 September 2026.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

Tokyo Core CPI y/y (11:30 pm)

What can we expect from JPY today?

The Japanese yen remains under pressure as markets focus on the upcoming Bank of Japan policy decision and whether policymakers will signal further interest-rate increases. The BOJ is expected to maintain a cautious approach while keeping a more hawkish tone due to persistent inflation pressures, rising import costs, and concerns over yen weakness. Recent reports indicate that the central bank is balancing the need to support the economy while preventing further depreciation of the currency, with markets watching closely for guidance on future hikes.

Central Bank Notes:

• The Policy Board of the Bank of Japan maintained the short-term policy rate at 0.75% at the 15–16 June 2026 meeting, in line with market expectations, while reiterating a cautious and data-dependent approach to further policy normalization amid mixed domestic and external conditions.
• The BOJ continues to target the uncollateralized overnight call rate around 0.75%, with policymakers signaling that any move toward 1.0% will depend on sustained wage growth, inflation durability above target, stable financial conditions, and limited downside risks to growth rather than a fixed tightening schedule.
• JGB purchase tapering remains on track, with monthly bond buying continuing to moderate under the previously announced framework. The BOJ maintains flexibility to intervene or temporarily adjust purchase operations if sharp volatility emerges in the Japanese government bond market or if excessive yen fluctuations threaten financial stability.
• Japan’s economy shows moderate but uneven growth heading into mid-2026, supported by resilient domestic demand, corporate investment, and recovering external activity, although weaker global manufacturing momentum and geopolitical tensions continue to weigh on the export outlook.
• Core CPI (excluding fresh food) remains near the mid-1% y/y range, while underlying inflation indicators, including core-core measures and services inflation, continue to hover around or above 2%, supported by stronger wage dynamics and pass-through effects from prior cost increases.
• Domestic inflation pressures remain supported by 2026 Shunto wage settlements near 5%, labor shortages, and firm services pricing. However, easing import costs and stabilizing commodity prices are helping moderate headline inflation, while risks persist from renewed energy volatility and yen depreciation.
• Near-term real GDP growth may remain below trend, reflecting the lagged impact of tighter financial conditions and external uncertainty, but rising household incomes, accommodative real rates, and fiscal support measures are expected to gradually support consumption and business investment.
• Over the medium term, the BOJ continues to expect that labor-market tightness, wage growth, and structural productivity improvements will help sustain inflation around the 2% target, leaving room for a gradual move toward 1.0% policy rates into late-2026 or 2027, provided inflation and economic momentum remain aligned.
• The next meeting is on 30 to 31 July 2026.

Next 24 Hours Bias

Strong Bearish

Oil

Key news events today

No major news event

What can we expect from Oil today?

Oil sentiment is currently bullish in the short term, driven mainly by geopolitical risk, tighter U.S. inventories, and concerns over potential supply disruptions. However, traders should remain cautious because any signs of de-escalation in Middle East tensions could trigger profit-taking and a sharp pullback. The market will also closely monitor OPEC+ supply decisions and global demand expectations, as longer-term forecasts still point to uncertainty around supply growth and consumption levels.

Next 24 Hours Bias
Strong Bullish