Asia Fundamental Forecast | 13 November 2026 | IC

Asia Fundamental Forecast | 13 November 2026 | IC

What happened in the U.S. session?

The U.S. session was dominated by stronger expectations of Federal Reserve rate hikes, rising Treasury yields, and renewed geopolitical tensions involving Iran. The U.S. dollar benefited from higher yields, putting significant pressure on gold and major currency pairs. Oil moved higher on concerns about potential supply disruptions, while Nvidia-related uncertainty weighed on technology stocks and Bitcoin. Although unemployment claims increased slightly, continuing claims declined, suggesting that the U.S. labor market remains relatively resilient.

What does it mean for the Asia Session?

Asian traders should focus on the stronger US dollar, rising US bond yields, and growing expectations of further Federal Reserve tightening. These developments are putting pressure on gold and currencies such as the Australian and New Zealand dollars.

The Japanese yen is another major focus as USD/JPY approaches 160, increasing the risk of intervention from Japanese authorities. Meanwhile, renewed US-Iran tensions are supporting oil prices and increasing inflation concerns.

The Dollar Index (DXY)

Key news events today

Core PPI m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

What can we expect from the DXY today?

The US dollar remains strongly bullish heading into Friday, supported by stronger-than-expected inflation, rising Treasury yields, and growing expectations of another Federal Reserve interest-rate increase in December.

The dollar’s strength is putting pressure on EUR/USD, GBP/USD, AUD/USD, and NZD/USD, while USD/JPY remains close to the important 160.00 level.

Central Bank Notes:

• The Federal Open Market Committee (FOMC) kept interest rates unchanged at 3.75%–4.00% at its October 27–28 meeting. The decision was approved by a 10–2 vote, following September’s 25-basis-point rate hike. Two members preferred another 25-basis-point increase.
• The labor market remains relatively stable. The Fed noted that job gains have kept pace with workforce growth and that the unemployment rate has changed little. Employment conditions remain an important factor in future policy decisions.
• Inflation remains above the Fed’s 2% target. Policymakers want more economic data to assess whether inflation is moving sustainably towards the target. Persistent inflation could increase the possibility of further rate hikes.
• The Fed upgraded its assessment of the U.S. economy from a solid pace of growth to a strong pace. Domestic spending remains resilient, productivity growth is strong, and business investment remains robust. However, geopolitical developments continue to create uncertainty.
• The Fed has kept the door open to further rate hikes if inflation remains elevated. The latest decision suggests policymakers want more evidence before making their next move. Markets are watching closely for signals about a possible rate increase in December.
• Chair Kevin Warsh continues to emphasize the importance of bringing inflation back to the 2% target. The October decision reflects a cautious approach, with the Fed waiting for more information before adjusting interest rates again.
• The Fed’s decision could influence the U.S. dollar, Treasury yields, gold, and other financial markets. Expectations of higher interest rates may support the dollar and pressure gold, while signs of easing inflation could weaken the dollar and support gold prices. Market reactions will depend on incoming economic data and expectations for future policy.
• The next meeting is scheduled for 8 to 9 December 2026.

Next 24 Hours Bias

Strongly Bullish

Gold (XAU)

Key news events today

Core PPI m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

What can we expect from the Gold today?

Gold is facing strong bearish pressure as a stronger US dollar, rising Treasury yields, and expectations of another Federal Reserve rate hike continue to weigh on prices. Although geopolitical tensions and rising oil prices are creating some safe-haven demand, inflation concerns are reinforcing expectations of higher interest rates. Gold has attempted a small recovery after Thursday’s sharp decline, but the broader short-term outlook remains weak.

Next 24 Hours Bias
Strongly Bearish

The Australian Dollar (AUD)

Key news events today

No major news event

What can we expect from the AUD today?

The Australian dollar is attempting a modest recovery on Friday, but its overall outlook remains bearish. The main pressure comes from a stronger US dollar and growing expectations of another Federal Reserve rate increase in December. Although Australian inflation remains elevated, markets increasingly believe the RBA may have finished raising interest rates. Traders should pay close attention to today’s US PPI report, as stronger inflation could push AUD/USD lower, while softer figures could provide some relief.

Central Bank Notes:

• The RBA raised its cash rate by 25 basis points to 4.85% on 3 November 2026, marking its fifth rate hike of the year and the highest level in 18 years. The decision was split, with six members supporting the increase and three voting to hold. Policymakers remain concerned about persistent inflation.
• Inflation remains above the RBA’s 2–3% target. Headline inflation reached 3.9% in the September quarter, while trimmed-mean inflation increased to 3.7%. Higher fuel prices and persistent domestic cost pressures continue to make inflation difficult to control.
• Australia’s unemployment rate averaged 4.6% in the September quarter, showing signs of gradual labor-market cooling. However, employment growth has remained relatively resilient, suggesting that the economy continues to support jobs despite higher borrowing costs.
• Economic growth has slowed, with weaker household consumption and softer housing conditions. Housing prices were almost 5% below their March peak by September. However, investment in data centers has provided some support to economic activity.
• Wage growth remains a concern as businesses continue to face higher labor and operating costs. The RBA expects wage growth to remain relatively firm in the near term before gradually moderating as labor-market conditions ease.
• Higher global energy prices, driven partly by ongoing Middle East tensions, are adding to Australia’s inflation pressures. The RBA expects headline inflation to reach 4.5% in the December quarter of 2026, making further monetary policy easing difficult.
• Following November’s rate increase, the RBA may adopt a more cautious approach as it assesses the impact of higher interest rates on inflation, employment, and household spending. However, further tightening remains possible if inflation stays elevated. The next meeting is scheduled for 7–8 December 2026, with the decision due on 8 December.
• The next meeting is on 8 December 2026.

Next 24 Hours Bias

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news event

What can we expect from the NZD today?

The NZD is facing bearish pressure because the US dollar is strengthening and markets expect the Federal Reserve to maintain a tighter monetary policy. Meanwhile, the RBNZ is keeping interest rates at 2.75%, and concerns about New Zealand’s economic outlook are limiting demand for the Kiwi. Traders should watch US PPI today and New Zealand inflation expectations next Tuesday for further direction.

Central Bank Notes:

• The Reserve Bank of New Zealand (RBNZ) kept the Official Cash Rate (OCR) unchanged at 2.75% on 28 October 2026. The decision was close, with four members voting to hold rates and three supporting a hike. The bank chose to assess incoming economic data before making further changes.
• Annual inflation eased from 4.1% in June to 3.7% in September 2026, but it remains above the RBNZ’s 1–3% target range. The bank expects inflation could rise to 4.4% by the end of the year, partly due to higher fuel costs.
• Ongoing disruptions in global energy markets are increasing fuel-price uncertainty. Higher energy costs could push up transportation and production expenses, keeping inflation elevated. A weaker New Zealand dollar is also adding to near-term inflation pressures.
• Although the RBNZ held rates in October, the close vote suggests further increases remain possible. Policymakers will monitor inflation, domestic price pressures, and economic activity before deciding whether additional tightening is necessary. The next decision will depend on incoming data rather than a fixed plan.
• New Zealand’s economy continues to recover, but growth remains uneven. Strong export performance and resilient demand from trading partners are supporting economic activity, while weak household spending and housing-market conditions continue to limit the recovery.
• Households remain under pressure from the cost of living and uncertain economic conditions. Weak spending and subdued housing activity could slow the recovery, making it important for the RBNZ to balance inflation control with economic growth.
• New Zealand’s labor market remains weak, with unemployment at 5.6% in the June 2026 quarter. Subdued wage growth is helping limit some inflation pressures, but a weak job market remains a concern for policymakers. The next unemployment report is scheduled for 4 November 2026.
• The RBNZ’s next monetary policy decision is scheduled for 9 December 2026. Traders will closely monitor inflation, employment data, fuel prices, and the bank’s guidance for clues about whether interest rates could rise further
• The next meeting is on 9 December 2026.

Next 24 Hours Bias

Strongly Bearish

The Japanese Yen (JPY)

Key news events today

No major news event

What can we expect from the JPY today?

The Japanese yen is likely to remain weak in the short term as expectations of a December Fed rate hike support the US dollar. However, the threat of Japanese currency intervention around 160.00 could cause sudden reversals in USD/JPY. Traders should closely monitor US inflation data, Japan’s GDP figures, and further BOJ policy signals.

Central Bank Notes:

• The BOJ maintained its policy rate at 1.25% at its October 29–30 meeting. The decision was passed by an 8–1 vote, with one member favoring a 25-basis-point hike to 1.50%.
• The BOJ indicated that underlying inflation has reached levels consistent with its 2% target, although it still needs to ensure inflation remains stable around that level.
• Governor Kazuo Ueda maintained a cautious but increasingly hawkish stance, signalling that further interest-rate hikes remain possible as inflation risks increase.
• The bank revised its inflation outlook higher, highlighting rising energy and raw-material costs as potential sources of additional price pressure.
• Japan’s economy continues to recover moderately, while domestic demand and business conditions remain important factors in the BOJ’s policy decisions.
• Yen weakness remains a major concern because it increases import costs and adds to inflationary pressure. The BOJ continues to monitor exchange-rate movements closely.
• The BOJ is also continuing its balance-sheet normalization, including the gradual reduction of Japanese government bond purchases and adjustments to its ETF disposal plans. 
• The BOJ remains on a gradual tightening path. Further rate increases will depend on inflation, wage growth, economic conditions, and financial-market developments. Markets are watching December for a possible rate hike.
• The next meeting is on 17-18 December 2026.

Next 24 Hours Bias

Strongly Bearish

Oil

Key news events today

No major news event

What can we expect from the Oil today?

Oil prices are under bearish pressure this Friday as optimism over a possible U.S.–Iran diplomatic resolution reduces concerns about supply disruptions. The latest EIA report also showed a much larger-than-expected increase in U.S. crude inventories, while rising OPEC+ production is adding to supply concerns.

Next 24 Hours Bias
Medium Bearish

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