{"id":82208,"date":"2026-07-17T16:43:45","date_gmt":"2026-07-17T06:43:45","guid":{"rendered":"https:\/\/www.icmarkets.com.au\/blog\/?p=82208"},"modified":"2026-07-17T16:43:47","modified_gmt":"2026-07-17T06:43:47","slug":"ic-markets-europe-fundamental-forecast-17-july-2026","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com.au\/blog\/ic-markets-europe-fundamental-forecast-17-july-2026\/","title":{"rendered":"IC Markets &#8211; Europe Fundamental Forecast | 17 July 2026"},"content":{"rendered":"\n<p><strong>IC Markets &#8211; Europe Fundamental Forecast | 17 July 2026<\/strong><strong><br \/><\/strong><\/p>\n\n\n\n<p><strong>What happened in the Asia session?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>Market sentiment was driven primarily by geopolitical developments and positioning ahead of key U.S. events later in the day. Crude oil remained well bid after renewed U.S.\u2013Iran hostilities heightened concerns over potential supply disruptions through the Strait of Hormuz, leaving Brent and WTI on track for their strongest weekly gains in months. At the same time, the U.S. dollar traded mixed: expectations for additional Federal Reserve tightening eased following softer U.S. inflation data earlier in the week, but safe-haven demand generated by geopolitical risks helped limit the dollar&#8217;s downside.<br \/><br \/><strong>What does it mean for the Europe &amp; US sessions?<\/strong><strong><br \/><\/strong><br \/>The University of Michigan Consumer Sentiment and Inflation Expectations reports, together with President Trump&#8217;s speech, will see investors reassess the U.S. economic outlook following this week&#8217;s softer inflation data. Stronger consumer confidence or higher inflation expectations could revive demand for the U.S. dollar by supporting expectations that the Federal Reserve will keep policy restrictive for longer. Conversely, weaker data would reinforce the recent dovish shift in rate expectations, potentially weighing on the dollar while supporting gold and risk assets.<br \/>\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>President Trump Speaks (1:00 am GMT)<br \/><br \/>Prelim UoM Consumer Sentiment (2:00 pm GMT)<br \/><br \/>Prelim UoM Inflation Expectations (2:00 pm GMT)<br \/><br \/><strong>What can we expect from DXY today?<\/strong><\/p>\n\n\n\n<p>The U.S. dollar is trading with a slightly bearish bias on Friday, after this week&#8217;s softer-than-expected U.S. CPI and PPI inflation reports significantly reduced expectations of another near-term Federal Reserve rate hike. Futures markets have sharply lowered the probability of a July rate increase, weighing on Treasury yields and limiting broad dollar strength. Nevertheless, geopolitical tensions in the Middle East and higher oil prices continue to provide the greenback with safe-haven support, preventing a deeper decline.<br \/><br \/><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Federal Open Market Committee (FOMC) left the federal funds rate unchanged at 3.50%\u20133.75% at its June 16\u201317, 2026, meeting, marking another pause in the policy cycle. Under new Fed Chair Kevin Warsh, policymakers signaled a more cautious and hawkish stance as inflation remains above target despite moderating energy prices.<\/li>\n\n\n\n<li>The Committee remains committed to achieving maximum employment and returning inflation to its 2% objective. Labor market conditions have remained relatively stable, with job gains continuing at a moderate pace and the unemployment rate projected to remain near 4.4% through 2026.<\/li>\n\n\n\n<li>Inflation continues to be the primary concern for policymakers. Headline inflation remains elevated, supported by earlier energy-related price pressures and persistent services inflation. The June projections showed higher inflation forecasts than previously expected, leading several officials to favor keeping policy restrictive for longer.<\/li>\n\n\n\n<li>Economic activity continues to expand at a moderate pace. Productivity growth, capital investment, and AI-related spending remain supportive of growth, while consumer spending and housing activity show signs of slowing compared with late 2025 and early 2026.<\/li>\n\n\n\n<li>The June 2026 Summary of Economic Projections (SEP) revealed a more divided Committee. Nine officials projected at least one rate hike during 2026, while others expected rates to remain unchanged or eventually decline. The median outlook shifted toward a higher-for-longer policy path compared with earlier projections.<\/li>\n\n\n\n<li>The Committee emphasized a data-dependent approach and noted that future decisions will depend on incoming data on inflation, employment, and economic growth. Officials acknowledged that geopolitical developments and energy markets remain important upside risks to inflation.<\/li>\n\n\n\n<li>The FOMC continues its balance sheet normalization program, maintaining Treasury runoff caps at $5 billion per month and agency mortgage-backed securities (MBS) runoff caps at $35 billion per month, while ensuring ample reserves remain in the banking system.<\/li>\n\n\n\n<li>The next meeting is scheduled for 28 to 29\u00a0 July 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><br \/>Medium Bearish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Gold (XAU)<\/strong><strong><br \/><\/strong><strong><br \/><\/strong><strong>Key news events today<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>President Trump Speaks (1:00 am GMT)<\/p>\n\n\n\n<p>Prelim UoM Consumer Sentiment (2:00 pm GMT)<\/p>\n\n\n\n<p>Prelim UoM Inflation Expectations (2:00 pm GMT)<\/p>\n\n\n\n<p><strong>What can we expect from Gold today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>Gold traded with heightened volatility as investors balanced softer U.S. inflation data against renewed geopolitical tensions in the Middle East. While lower-than-expected U.S. inflation initially supported expectations that the Federal Reserve could keep interest rates unchanged, a sharp rally in crude oil prices driven by concerns over supply disruptions following renewed U.S.\u2013Iran hostilities revived inflation fears and reduced the appeal of non-yielding gold. As a result, spot gold hovered around $3,990 per ounce, recovering modestly during the session but remaining on track for its largest weekly decline in six weeks.<\/p>\n\n\n\n<p><br \/><strong>Next 24 Hours Bias&nbsp; &nbsp; <\/strong><strong><br \/><\/strong>Medium Bearish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Euro (EUR)<\/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 EUR toda<\/strong>y?<br \/><br \/>The euro remains relatively stable as investors await next week&#8217;s ECB policy meeting (July 22\u201323). Markets overwhelmingly expect the ECB to leave its deposit rate unchanged at 2.25%, but recent geopolitical tensions in the Middle East and the resulting surge in oil prices have led traders to price in a higher probability of another ECB rate hike as early as September. Higher energy prices are raising concerns that inflation could remain above the ECB&#8217;s 2% target despite recent moderation. Eurozone government bond yields have climbed, reflecting expectations that the ECB may maintain a hawkish tone even while economic growth remains sluggish.<\/p>\n\n\n\n<p><br \/><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Governing Council is expected to maintain the three key rates unchanged at their June levels into July, with the main refinancing rate around 2.15%, the marginal lending facility at 2.40%, and the deposit facility at 2.00%. Policy remains on a meeting\u2011by\u2011meeting, data\u2011dependent footing.<\/li>\n\n\n\n<li>Real GDP growth is expected to be modest: around 0.9% in 2026, 1.3% in 2027, and 1.4% in 2028. Quarterly momentum implies roughly 0.2\u20130.3% q\/q growth in Q2 2026, consistent with resilience seen late\u20112025.<\/li>\n\n\n\n<li>Balance\u2011sheet normalization continues smoothly. APP and PEPP wind\u2011downs are effectively completed; the Eurosystem is allowing remaining longer\u2011dated holdings to run off. No material liquidity shortages are expected; the Governing Council will monitor transmission and market functioning closely.<\/li>\n\n\n\n<li>Upside risks: stronger\u2011than\u2011expected services inflation persistence, renewed energy or commodity price shocks, and tighter global financial conditions that transmit unevenly.<\/li>\n\n\n\n<li>The ECB is likely to keep policy rates on hold while emphasizing data dependence: future moves will be guided by incoming HICP prints, wage dynamics, and indicators of monetary transmission (credit, deposit flows, and market functioning).<\/li>\n\n\n\n<li>With rates expected to be on hold and inflation slightly above target for 2026, the EUR may trade with two\u2011way volatility; upside for the EUR if euro\u2011area data surprise to the upside or if US data weaken relative to the euro\u2011area, but limited unilateral appreciation given symmetric policy risks.<\/li>\n\n\n\n<li>Curve pricing should reflect a prolonged period of unchanged rates with modest probability of hikes if upside inflation surprises continue; front-end stays anchored, while longer\u2011dated yields respond to inflation\u2011expectation movements and global risk sentiment.<\/li>\n<\/ul>\n\n\n\n<p>\u200bThe next meeting is on 22 to 23 July 2026<\/p>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><br \/>Medium Bullish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Swiss Franc (CHF)<\/strong><strong><br \/><\/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 CHF today?<\/strong><strong><br \/><\/strong><br \/>The Swiss franc (CHF) is trading with a mildly defensive tone on Friday, as traders balance the currency&#8217;s traditional safe-haven appeal against the U.S. dollar&#8217;s resilience following the Federal Reserve&#8217;s recent hawkish guidance. The Swiss National Bank (SNB) continues to maintain its policy rate at 0.00%, with subdued domestic inflation allowing policymakers to remain patient. Meanwhile, reduced geopolitical tensions have eased demand for safe-haven currencies, limiting CHF strength, although the SNB remains prepared to intervene in the foreign exchange market if excessive franc appreciation threatens Swiss price stability.<br \/><br \/><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>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.<\/li>\n\n\n\n<li>Inflation remains exceptionally subdued in Switzerland. Recent data show consumer price growth staying comfortably within the SNB&#8217;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.<\/li>\n\n\n\n<li>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&#8217;s decision to maintain rates at current levels.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>Swiss economic activity remains resilient but modest. GDP growth is expected to remain around 1\u20131.5% in 2026, supported by domestic demand, although manufacturing and export-oriented sectors continue to face challenges from a strong franc and softer foreign demand.<\/li>\n\n\n\n<li>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.<\/li>\n<\/ul>\n\n\n\n<p><br \/>The next meeting is on 24 September 2026.<\/p>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><br \/>Medium Bearish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Pound (GBP)<\/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 GBP today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The British pound is trading with a slightly bullish bias supported by improving confidence in the UK economy and expectations that the Bank of England may keep interest rates higher for longer. Sterling remains close to a two-month high after UK data showed May GDP expanded by 0.1%, reversing April&#8217;s contraction, with growth led by the services sector. Markets have also welcomed easing concerns over the UK&#8217;s fiscal outlook following expectations that the incoming government will appoint a more fiscally moderate finance minister, reducing fears of aggressive borrowing.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Bank of England\u2019s Monetary Policy Committee (MPC) met on 17\u201318 June 2026 and voted 7\u20132 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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>The next meeting is on 30 July 2026.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Medium Bullish<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong><br \/><\/strong><strong><br \/><\/strong><strong>The Canadian Dollar (CAD)<\/strong><strong><br \/><\/strong><strong><br \/><\/strong><strong>Key news events today<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>No major news event<\/p>\n\n\n\n<p><strong>What can we expect from CAD today?<\/strong><\/p>\n\n\n\n<p>The Canadian dollar (CAD) is ending the week supported by a combination of the Bank of Canada&#8217;s policy decision and resilient domestic economic data. On Wednesday, the Bank of Canada kept its benchmark interest rate unchanged at 2.25% for the sixth consecutive meeting, while acknowledging that economic growth has started to recover and inflation is expected to gradually moderate. Governor Tiff Macklem maintained a cautious but slightly more optimistic tone, emphasizing that future policy decisions will remain data-dependent amid ongoing uncertainty surrounding U.S. trade policy and geopolitical risks.<br \/>\u200b<br \/>Central Bank Notes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>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 and reflected the Council\u2019s view that the current stance remains appropriately restrictive to return inflation sustainably to the 2% target over the projection horizon while balancing two\u2011sided risks.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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\u20132.5% 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.<\/li>\n\n\n\n<li>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\u20112024. 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\u2011related and some service sectors.<\/li>\n\n\n\n<li>Headline CPI has drifted above 2% and was around 3.2% year\u2011over\u2011year 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\u2011term 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.<\/li>\n\n\n\n<li>High\u2011frequency indicators point to continued expansion in manufacturing and exports into early summer, with Purchasing Managers\u2019 Index readings still in positive territory, supported by solid energy\u2011sector activity and demand for intermediate goods. However, surveys indicate that firms\u2019 capex intentions remain cautious in light of trade uncertainty and past weakness in domestic demand, suggesting investment may recover only gradually.<\/li>\n\n\n\n<li>Credit growth remains moderate, and bank lending spreads and deposit pricing show limited additional pass\u2011through from recent global rate moves, keeping domestic financial conditions relatively stable. Mortgage rates are still somewhat elevated compared with pre\u2011tightening levels but have been broadly unchanged in recent months, contributing to a measured moderation in housing activity rather than an abrupt adjustment.<\/li>\n\n\n\n<li>The next meeting is on 2 September 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><br \/>Weak Bearish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Oil<\/strong><strong><br \/><\/strong><strong><em><br \/><\/em><\/strong><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news event<br \/><strong><br \/><\/strong><strong>What can we expect from Oil today?<\/strong><\/p>\n\n\n\n<p>Crude oil prices are trading sharply higher today, with Brent crude approaching $85 per barrel and WTI nearing $80 per barrel, putting oil on track for one of its strongest weekly gains in months. The primary driver is the renewed escalation in U.S.-Iran tensions, which has significantly increased concerns over potential disruptions to global crude supplies. Reports indicate intensified military activity near the Strait of Hormuz and growing threats to shipping through the Red Sea, prompting traders to add a sizeable geopolitical risk premium to oil prices.&nbsp;<\/p>\n\n\n\n<p><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Weak Bearish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n","protected":false},"excerpt":{"rendered":"<p>IC Markets &#8211; Europe Fundamental Forecast | 17 July 2026 What [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":79417,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[196,215,339],"tags":[],"class_list":["post-82208","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\/82208","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=82208"}],"version-history":[{"count":2,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/82208\/revisions"}],"predecessor-version":[{"id":82234,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/82208\/revisions\/82234"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/media\/79417"}],"wp:attachment":[{"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/media?parent=82208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/categories?post=82208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/tags?post=82208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}