{"id":80946,"date":"2026-06-01T17:24:54","date_gmt":"2026-06-01T07:24:54","guid":{"rendered":"https:\/\/www.icmarkets.com.au\/blog\/?p=80946"},"modified":"2026-06-01T17:24:56","modified_gmt":"2026-06-01T07:24:56","slug":"ic-markets-asia-fundamental-forecast-01-june-2026","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com.au\/blog\/ic-markets-asia-fundamental-forecast-01-june-2026\/","title":{"rendered":"IC Markets &#8211; Asia Fundamental Forecast | 01 June 2026"},"content":{"rendered":"\n<p><strong>IC Markets &#8211; Asia Fundamental Forecast | 01 June 2026<\/strong><\/p>\n\n\n\n<p><strong>What happened in the U.S. session?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>Markets reached record highs fueled by Dell&#8217;s blockbuster AI-driven earnings (stock up 32.76%) and sustained tech momentum, while the Fed&#8217;s rate hold bolstered the dollar (DXY 106.42) against majors like the euro. Simultaneously, oil prices tumbled nearly 20% from their 2026 peak as traders priced in a tentative U.S.-Iran ceasefire deal that would reopen the Strait of Hormuz, with Brent settling around $92\/barrel and WTI near $87.<br \/><br \/><strong>What does it mean for the Asia Session?<\/strong><\/p>\n\n\n\n<p>Asian traders face a pivotal Monday with the US-Iran ceasefire deal in limbo after Trump&#8217;s Friday meeting yielded no final determination, keeping oil market uncertainty elevated despite recent price dips below $100\/barrel. The positive counterpoint is Taiwan&#8217;s explosive 14.6% Q1 GDP growth, the strongest since 1978, driven by record AI hardware exports that upgraded its 2026 growth forecast to 9.6%, reinforcing the AI semiconductor rally that pushed Japan&#8217;s Topix and Korea&#8217;s Kospi to record highs at month-end.<\/p>\n\n\n\n<p>\u200b<br \/><strong>The Dollar Index (DXY)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>FOMC Member Powell Speaks (12:30 pm GMT)<br \/><br \/>ISM Manufacturing PMI (2:00 pm GMT)<br \/><br \/>ISM Manufacturing Prices (2:00 pm GMT)<br \/><br \/><strong>What can we expect from DXY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The U.S. dollar is facing downward pressure, as optimism surrounding a potential U.S.-Iran ceasefire agreement reduces safe-haven demand and sends oil prices tumbling to around $90\/barrel, eroding the greenback&#8217;s energy-driven strength. The dollar index (DXY) hovers near 99, having firmed from earlier 2026 lows but now confronting headwinds from sticky U.S. inflation (Core PCE at 3.3%) and growing market expectations for two Federal Reserve rate cuts this year versus the Fed&#8217;s own one-cut projection.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Federal Open Market Committee (FOMC) is widely expected to hold the federal funds rate target range steady at 3.50%\u20133.75% at its April 28\u201329, 2026, meeting, as oil prices remain elevated around $108 per barrel for Brent crude amid ongoing US-Israel tensions with Iran, alongside surging inflation from energy shocks, further delaying any 2026 rate cuts potentially beyond September.<\/li>\n\n\n\n<li>The Committee continues to pursue maximum employment and 2% inflation goals, with the labor market showing mixed signals as nonfarm payrolls rose by 178,000 in March 2026\u2014beating lowered expectations but driven partly by strike reversals\u2014and the unemployment rate edged down to 4.3% from 4.4% in February.<\/li>\n\n\n\n<li>Officials face heightened risks from geopolitical tensions, soaring oil prices, and accelerating inflation, with CPI jumping to 3.3% year-over-year in March 2026 from 2.4% in February due to a 10.9% monthly energy surge, headline PCE pressured higher, and core PCE estimates around 3.1% or more.<\/li>\n\n\n\n<li>Economic activity continues to cool after robust Q4 2025 growth near 5%, with the Atlanta Fed GDPNow estimating Q1 2026 growth at 1.3% amid softer consumer spending, strike impacts, and labor data despite some resilience.<\/li>\n\n\n\n<li>March 2026&#8217;s Summary of Economic Projections forecasts 2026 unemployment at a median around 4.4%, GDP growth revised higher, and core PCE up to 2.7%, with the dot plot still signaling one cut in 2026 to a median 3.25%\u20133.50% funds rate amid softer labor but inflation upticks.<\/li>\n\n\n\n<li>The Committee maintains its data-dependent stance amid a mixed labor market, inflation well above target from oil shocks, and geopolitical risks, likely holding rates at 3.50%-3.75% with persistent divisions and hawkish tones on cuts.<\/li>\n\n\n\n<li>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 manage reserves amid post-2025 balance sheet adjustments.<\/li>\n\n\n\n<li>The next meeting is scheduled for 16 to 17 June 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak Bearish<\/p>\n\n\n\n<p><strong>Gold (XAU)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>FOMC Member Powell Speaks (12:30 pm GMT)<br \/><br \/>ISM Manufacturing PMI (2:00 pm GMT)<br \/><br \/>ISM Manufacturing Prices (2:00 pm GMT)<\/p>\n\n\n\n<p><strong>What can we expect from Gold today?<\/strong><\/p>\n\n\n\n<p>Gold entered June 2026 under pressure from high US interest rates, trading near $4,514 with expectations of a brief bearish correction testing $4,395 support before rebounding toward $5,245+ this week, as the metal maintains its longer-term bullish trend within a technical channel while geopolitical risks in the Middle East continue to underpin demand.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><br \/>Weak Bullish<\/p>\n\n\n\n<p><strong>The Australian Dollar (AUD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news event<\/p>\n\n\n\n<p><strong>What can we expect from AUD today?<\/strong><\/p>\n\n\n\n<p>The Australian dollar recently traded at 0.7187 against the US dollar as of May 29, 2026, marking a 0.33% daily gain and an impressive 11.74% appreciation over the past year, despite a slight 0.21% monthly decline. The AUD&#8217;s strength throughout early 2026 has been driven by the Reserve Bank of Australia&#8217;s hawkish monetary policy stance, including a 25 basis point rate hike to 3.85% in early 2026, with markets expecting approximately 40 basis points of additional tightening this year and an 80% probability of another May hike following upside inflation surprises.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to 4.35% at the 5 May 2026 meeting, moving into a more restrictive stance as inflation pressures re\u2011accelerated and the board judged the previous 4.10% level insufficient to re\u2011anchor the medium\u2011term outlook.<\/li>\n\n\n\n<li>The RBA lifted the cash rate from 4.10% to 4.35% at the 5 May meeting in an 8\u20131 vote, flagging that the stance is now \u201cmore restrictive\u201d and that the Council sees a low but non\u2011trivial chance of further hikes if inflation risks crystallise.<\/li>\n\n\n\n<li>Headline CPI has jumped to 4.6% year\u2011on\u2011year for the 12 months to March 2026, up from around 3.7% in February, with trimmed\u2011mean inflation still above 3.0% (about 3.3\u20133.8% depending on the series), keeping inflation clearly outside the 2\u20133% target band.<\/li>\n\n\n\n<li>Recent monthly indicators remain sticky in services, housing\u2011related costs, and discretionary spending, with January and March data showing only modest easing and some upside surprises in housing\u2011price\u2011related components, underpinning the case for a stronger\u2011than\u2011expected May hike.<\/li>\n\n\n\n<li>Global growth has been modestly revised up but remains tempered by ongoing geopolitical tensions, commodity\u2011price volatility, and elevated oil prices linked to the Middle East conflict, which directly feed into Australian import\u2011price and transport\u2011cost inflation.<\/li>\n\n\n\n<li>Markets now price the cash rate at 4.35% in June, with futures pathways suggesting a high\u2011probability hold at the June meeting and only a modest chance of another 25bp hike later in 2026, contingent on further upside in CPI or services\u2011price data.<\/li>\n\n\n\n<li>The RBA continues to emphasise its \u201cdata\u2011dependent\u201d approach under the dual mandate, seeking to bring inflation back toward target without materially undershooting growth or employment, while acknowledging that the Middle East\u2011driven shock has shifted the path of inflation and policy.<\/li>\n\n\n\n<li>The May communication leaned hawkishly neutral to hawkish, with the decision to hike by 25bp and a run\u2011of\u2011material referencing rising inflation expectations and the risk of second\u2011round effects, while still leaving room for a pause in June if upcoming monthly CPI and labour\u2011force data show a moderating trend.<\/li>\n\n\n\n<li>The next meeting is on 15 to 16 June 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak Bearish<\/p>\n\n\n\n<p><strong>The Kiwi Dollar (NZD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>No major news event<\/p>\n\n\n\n<p><strong>What can we expect from NZD today?<\/strong><\/p>\n\n\n\n<p>The New Zealand dollar has been supported recently by the Reserve Bank of New Zealand&#8217;s (RBNZ) shift toward a less accommodative stance under new Governor Anna Breman, who signaled readiness to raise rates if core inflation accelerates. Markets have priced in a rate increase by July 2026, with traders assigning over 40% probability to a May hike. The currency also benefited from improved sentiment around US-Iran talks and strong external demand from China, New Zealand&#8217;s key trading partner.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Reserve Bank of New Zealand&#8217;s Monetary Policy Committee (MPC) held the Official Cash Rate (OCR) steady at 2.25% at its 27 May 2026 Monetary Policy Statement, but the decision was unprecedented\u2014a 3-3 split requiring Governor Anna Breman&#8217;s casting vote. Three members (Hansen, Gourley, Gai) voted for an immediate 25bp hike to 2.50%, while three (Breman, Silk, Conway) voted to hold.<\/li>\n\n\n\n<li>While the OCR remained unchanged, the RBNZ issued its most hawkish guidance since the cutting cycle ended, stating the OCR will &#8220;likely need to rise sooner and by more than previously envisioned.&#8221; Market pricing now indicates a 72\u201373% probability of a rate hike at the next meeting on 8 July 2026, with swaps pricing in roughly 16bps of tightening.<\/li>\n\n\n\n<li>Annual CPI inflation remained at 3.1% in Q1 2026 (above the 1\u20133% target band) for two consecutive quarters. The RBNZ now forecasts inflation to peak at 4.3% in the September 2026 quarter\u2014driven by Middle East oil shocks\u2014before returning to the 2% target midpoint by mid-2027.<\/li>\n\n\n\n<li>The RBNZ revised its terminal OCR forecast upward to 3.28% over the next three years (from 3.0%), implying approximately 100 basis points of total tightening ahead. The updated path suggests at least two additional hikes by year-end 2026, with the OCR potentially rising to 2.50% by September 2026 and higher thereafter.<\/li>\n\n\n\n<li>GDP growth is projected at 0% in Q2 2026 and only 0.2% quarter-on-quarter in Q3, reflecting an early but unconvincing recovery. Unemployment, currently at 5.3% (near a decade-high), is expected to peak at 5.4% and remain there until June 2027.<\/li>\n\n\n\n<li>Retail sales volume rose 0.9% in Q1 2026, and electronic card data showed 2.7% annual growth in March, but high-frequency data reveals shrinking budget room as wholesale interest rates climb. Mortgage holders are increasingly shifting to two-year fixed rates for repayment certainty despite the OCR hold.<\/li>\n\n\n\n<li>Stronger dairy and meat export revenues (meat exports up 7% to $13.2B FY2026) and a softer NZD (TWI ~68%) support the external balance, while Middle East oil volatility poses upside inflation risks. The NZD jumped 0.7% against the USD immediately after the announcement, and two-year swap rates rose 3bps.<\/li>\n\n\n\n<li>Markets now expect the first hike in this tightening cycle, with the MPC&#8217;s internal division suggesting any future decision may again be contentious. Policy remains below the ~3% neutral rate, but the shift from &#8220;wait-and-see&#8221; to &#8220;preemptive tightening&#8221; is now clear.<\/li>\n\n\n\n<li>The next meeting is on 8 July 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak Bearish<\/p>\n\n\n\n<p><strong>The Japanese Yen (JPY)<\/strong><strong><br \/><\/strong><strong><br \/><\/strong><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news event<\/p>\n\n\n\n<p><strong>What can we expect from JPY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>Today, JPY moves will be driven primarily by global yields, risk sentiment, and any fresh BoJ or US Fed commentary. With several European and North American macro prints scheduled (German CPI, BOE speech, Canadian GDP), the yen may react indirectly through shifts in global rates and risk appetite. Risk-off flows would strengthen the yen, while higher global yields and stronger risk appetite would weaken it.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Policy Board of the Bank of Japan left the short\u2011term policy rate unchanged at 0.75% at the 27\u201328 April 2026 meeting, with markets broadly expecting the same level into May 2026 as the bank continues a data\u2011dependent, gradual\u2011normalisation stance.<\/li>\n\n\n\n<li>The BOJ targets the uncollateralized overnight call rate around 0.75%, signaling that any further hikes toward 1.0% will hinge on wage\u2011inflation persistence, yen stability, and real\u2011activity data rather than a pre\u2011announced timetable.<\/li>\n\n\n\n<li>JGB tapering continues on plan, with outright purchases trimmed by \u00a5400 billion quarterly through Q1 2026, then reduced to \u00a5200 billion from April onward, aiming for roughly \u00a52\u20133 trillion in monthly net purchases by mid\u20112026, adjustable if market or yen volatility spikes.<\/li>\n\n\n\n<li>Japan\u2019s economy posts moderate growth into Q1 2026, supported by resilient exports and prior stimulus, but the BOJ has downgraded its 2026 growth outlook as external headwinds and Middle\u2011East\u2011related shocks weigh on the pace.<\/li>\n\n\n\n<li>Core CPI (ex\u2011fresh food) is running in the mid\u20111% range y\/y, with headline inflation at about 1.5% y\/y in March 2026, while core\u2011core measures remain above 2%, reflecting sticky services\u2011side and wage\u2011driven inflation.<\/li>\n\n\n\n<li>Input\u2011cost pressures ease from prior peaks, yet services inflation, the 2026 shunto wage deals near 5%, and expectations anchored above 2% support continued price pressures, with upside risks from further yen weakness and geopolitical spikes.<\/li>\n\n\n\n<li>Near\u2011term real GDP may run below trend due to policy tightening and external shocks (e.g., Iran\u2011related energy risks), but negative real rates, wage gains, and targeted fiscal\/capex support should underpin a gradual rebound in consumption and investment.<\/li>\n\n\n\n<li>Medium\u2011term, overseas recovery, labor\u2011shortage\u2011driven wage growth, and productivity improvements are expected to keep core inflation near or above 2%, enabling the BOJ to gradually lift rates toward 1.0% in 2026\u20132027 if activity and wage\u2011inflation conditions remain aligned.<\/li>\n\n\n\n<li>The next meeting is on 15 to 16 June 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak Bearish<\/p>\n\n\n\n<p><strong>Oil<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>No major news event<\/p>\n\n\n\n<p><strong>What can we expect from Oil today?<\/strong><\/p>\n\n\n\n<p>Oil markets are experiencing a notable selloff as hopes for diplomatic resolution between the US and Iran gain traction, with both countries agreeing to extend a ceasefire and lift shipping restrictions through the strategically vital Strait of Hormuz, a chokepoint handling roughly 20% of global oil supply. This development triggered Brent crude&#8217;s steepest weekly decline since early April (down 10.5%) and pushed prices down to approximately $91\u201392 per barrel, while WTI fell to $87\u201388 per barrel.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Medium Bearish<\/p>\n","protected":false},"excerpt":{"rendered":"<p>IC Markets &#8211; Asia Fundamental Forecast | 01 June 2026 What [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":79410,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[196,215,339],"tags":[],"class_list":["post-80946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fundamental-analysis","category-market-analysis","category-recent-posts"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/80946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/comments?post=80946"}],"version-history":[{"count":1,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/80946\/revisions"}],"predecessor-version":[{"id":80947,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/80946\/revisions\/80947"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/media\/79410"}],"wp:attachment":[{"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/media?parent=80946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/categories?post=80946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/tags?post=80946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}