{"id":82488,"date":"2026-07-28T17:55:59","date_gmt":"2026-07-28T07:55:59","guid":{"rendered":"https:\/\/www.icmarkets.com.au\/blog\/?p=82488"},"modified":"2026-07-28T17:56:02","modified_gmt":"2026-07-28T07:56:02","slug":"ic-markets-europe-fundamental-forecast-28-july-2026","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com.au\/blog\/ic-markets-europe-fundamental-forecast-28-july-2026\/","title":{"rendered":"IC Markets &#8211; Europe Fundamental Forecast | 28 July 2026"},"content":{"rendered":"\n<p><strong>IC Markets &#8211; Europe Fundamental Forecast | 28 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 attention was dominated by Reserve Bank of Australia (RBA) Governor Michele Bullock&#8217;s speech, while traders also continued to react to geopolitical developments and position ahead of this week&#8217;s major central bank meetings, including the Federal Reserve and the Bank of Japan. Bullock reiterated that underlying inflation remains too high and stressed that the RBA is prepared to raise interest rates further if required to return inflation to its 2\u20133% target.<br \/><br \/><strong>What does it mean for the Europe &amp; US sessions?<\/strong><strong><br \/><\/strong><br \/>Traders are primarily focused on central bank commentary, U.S. consumer sentiment, and persistent geopolitical risks that continue to influence energy markets. Earlier in the day, RBA Governor Michele Bullock reiterated that underlying inflation remains too high and warned that the Reserve Bank remains prepared to raise interest rates further if inflation fails to return to target. Her hawkish remarks provided support to the Australian dollar and reinforced the view that central banks remain cautious despite slowing economic growth.<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>CB Consumer Confidence (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 remains moderately bullish heading into the New York session. Today&#8217;s key catalyst is the CB Consumer Confidence report, which is expected to show a modest improvement in household sentiment. A stronger-than-expected reading would reinforce expectations that the U.S. economy remains resilient and could provide additional support for the dollar, particularly against lower-yielding currencies. Conversely, a weaker-than-expected result could trigger some profit-taking on recent USD gains as traders await Wednesday&#8217;s Fed decision.<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 \/>Weak Bullish<\/p>\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>CB Consumer Confidence (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 is trading lower on Tuesday, as investors reduce exposure ahead of the start of the Federal Reserve&#8217;s two-day policy meeting. Spot gold has slipped toward $4,045\/oz, pressured by a stronger U.S. dollar, which has climbed to a one-month high amid growing speculation that the Fed could adopt a more hawkish tone than previously expected. While the consensus still favors the Fed leaving interest rates unchanged this week, markets have significantly increased the probability of a September rate hike, keeping Treasury yields elevated and limiting demand for non-yielding assets such as gold.<\/p>\n\n\n\n<p><br \/><strong>Next 24 Hours Bias&nbsp; &nbsp; <\/strong><strong><br \/><\/strong>Weak Bearish<\/p>\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 begins Tuesday on the defensive as the U.S. dollar remains supported by expectations that the Federal Reserve could keep monetary policy tighter for longer, weighing on the EUR\/USD exchange rate. Market sentiment continues to be shaped by last week&#8217;s European Central Bank (ECB) decision to leave interest rates unchanged at 2.25%, with policymakers emphasizing a meeting-by-meeting, data-dependent approach. While eurozone inflation has eased from its recent highs, uncertainty surrounding elevated energy prices and geopolitical tensions in the Middle East continues to keep the ECB cautious.<\/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 kept all three key interest rates unchanged at its 22\u201323 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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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&#8217;s 2% target for longer. Policymakers are closely monitoring the persistence of energy-driven inflation, wage developments, and any potential second-round effects.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n<\/ul>\n\n\n\n<p>\u200bThe next meeting is on 9 to 10 September 2026<\/p>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><br \/>Weak Bullish<\/p>\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 relatively firm but cautious tone as investors await several key global events, particularly the Federal Reserve&#8217;s policy decision later this week and fresh U.S. economic data. Demand for traditional safe-haven currencies, including the franc, has been supported by lingering geopolitical uncertainties and cautious market sentiment, although the currency&#8217;s upside remains limited by expectations that the Swiss National Bank (SNB) will keep monetary policy highly accommodative. The SNB has repeatedly emphasized its willingness to intervene in the foreign exchange market if excessive CHF strength threatens Switzerland&#8217;s inflation outlook and export competitiveness, while recent meeting minutes reaffirmed that stance.<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 \/>Weak Bearish<\/p>\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 but cautious tone today. GBP\/USD is holding near 1.3300, supported by the recent sharp decline in crude oil prices, which has eased concerns about imported inflation and reduced expectations that the Bank of England may need to raise interest rates further. Lower energy costs could also improve the UK\u2019s growth outlook, helping Sterling recover modestly after recent weakness.<\/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>Weak Bearish<\/li>\n<\/ul>\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 remains under pressure at the start of Tuesday&#8217;s trading after falling to a near two-week low against the U.S. dollar during Monday&#8217;s session. The main driver has been the sharp decline in crude oil prices, with hopes of easing geopolitical tensions in the Middle East reducing supply-risk premiums. As one of the world&#8217;s largest oil exporters, Canada&#8217;s currency tends to weaken when oil prices fall. At the same time, a firmer U.S. dollar ahead of the Federal Reserve&#8217;s July 28\u201329 policy meeting has added further downside pressure on the loonie, as markets have increased expectations that the Fed could deliver another rate hike.<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. It reflects 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 remain 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<p><strong>Oil<\/strong><strong><br \/><\/strong><strong><em><br \/><\/em><\/strong><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>API Crude Oil Stock (8:30 pm GMT)<br \/><strong><br \/><\/strong><strong>What can we expect from Oil today?<\/strong><\/p>\n\n\n\n<p>Oil prices remain under heavy selling pressure, extending the sharp decline that began earlier this week as traders increasingly price in a lower geopolitical risk premium. The main catalyst is the temporary pause in U.S. military strikes against Iran and renewed optimism that diplomatic negotiations could prevent further escalation. Brent crude has fallen to around $87 per barrel, while WTI has dropped to around $81 per barrel, marking one of the steepest two-day declines in months. Although tensions in the Middle East remain unresolved, the market is focusing on the possibility of improved oil flows through key shipping routes, including the Strait of Hormuz.<\/p>\n\n\n\n<p><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Strong Bullish<\/p>\n","protected":false},"excerpt":{"rendered":"<p>IC Markets &#8211; Europe Fundamental Forecast | 28 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-82488","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\/82488","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=82488"}],"version-history":[{"count":2,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/82488\/revisions"}],"predecessor-version":[{"id":82514,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/82488\/revisions\/82514"}],"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=82488"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/categories?post=82488"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/tags?post=82488"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}