IC – Asia Fundamental Forecast | 03 November 2026

IC – Asia Fundamental Forecast | 03 November 2026

What happened in the U.S. session?

The U.S. session was dominated by falling oil prices, a weaker dollar, and continued pressure on technology stocks. Hopes of diplomatic progress between the United States and Iran caused crude oil to fall sharply, easing inflation concerns and contributing to lower Treasury yields. The weaker dollar supported gold and major currency pairs, while the Nasdaq and S&P 500 struggled because of continued selling in AI and semiconductor stocks.

What does it mean for the Asia Session?

Tuesday’s Asian session is expected to be driven primarily by the RBA’s interest-rate decision, with markets widely anticipating a 25-basis-point increase to 4.85%. However, because much of this move is already priced in, traders should pay close attention to the RBA’s forward guidance and Governor Michele Bullock’s press conference. A more hawkish outlook could support the Australian dollar, while a less aggressive message could trigger a reversal.
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The Dollar Index (DXY)

Key news events today

JOLTS Job Openings (3:00 pm GMT)

Congressional Elections (All Day)

What can we expect from the DXY today?

The U.S. dollar enters Tuesday under pressure, with the Dollar Index trading near a one-month low around 101.76. Falling oil prices, easing inflation concerns, and declining Treasury yields have reduced demand for the greenback. However, expectations of further Federal Reserve tightening, relatively strong U.S. manufacturing activity, and uncertainty surrounding the Congressional elections could provide some support.

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

Medium Bullish 

Gold (XAU)

Key news events today

JOLTS Job Openings (3:00 pm GMT)

Congressional Elections (All Day)

What can we expect from the Gold today?

Gold is attempting to recover after last week’s heavy selling, with prices rebounding more than 2% on Monday as falling oil prices eased inflation concerns and investors reassessed Federal Reserve rate expectations. However, the recovery remains fragile because markets are still anticipating a possible December rate increase.

Next 24 Hours Bias
Strongly Bearish

The Australian Dollar (AUD)

Key news events today

Cash Rate (3:30 am GMT)

RBA Monetary Policy Statement (3:30 am GMT)

RBA Rate Statement (3:30 am GMT)

RBA Press Conference (4:30 am GMT)

What can we expect from the AUD today?

The Australian dollar is approaching an important trading session, with the RBA interest rate decision being the biggest catalyst. A rate increase to 4.85%, combined with hawkish comments from Governor Bullock, could strengthen AUD against the major currencies. However, if the RBA signals that interest rates are near their peak, the Australian dollar could weaken despite the expected hike. Traders should pay particular attention to the monetary policy statement and press conference, as these could determine the AUD’s next direction.

Central Bank Notes:

• The RBA raised the cash rate by 25bps to 4.60% on 29 September, its fourth hike of 2026 and the highest cash rate since 2011. The RBA said higher rates are needed to bring inflation back to target, while further tightening remains possible if inflationary pressures persist.
• Inflation has become a major concern for the RBA. August CPI rose to 4.0% year-on-year, up sharply from 3.5% in July, while trimmed-mean inflation remained at 3.6%. Higher housing and fuel costs were important contributors, keeping underlying inflation well above the RBA’s 2–3% target.
• The labor market is cooling but remains relatively resilient. Australia’s unemployment rate increased to 4.6% in August, while employment increased by around 39,500. The rise in unemployment provides some evidence that higher rates are slowing the economy, although employment growth remains positive.
• Wage growth remains an important inflation risk. The Wage Price Index increased 0.8% quarter-on-quarter and 3.2% year-on-year in Q2 2026. Moderating wage growth would help ease domestic inflation pressures, but wages remain above levels that would be consistent with very low inflation.
• Household demand is showing signs of slowing under higher interest rates. Household spending was unchanged in August after strong increases in June and July, although spending was still 6.8% higher than a year earlier. Housing activity also weakened, with total dwelling approvals falling 6.1% in August.
• Economic growth remains positive but subdued. Australia’s GDP increased 0.4% in Q2 2026 and 2.1% year-on-year, suggesting the economy is still expanding but not particularly strongly. The RBA will need to balance persistent inflation against the growing impact of restrictive monetary policy on households and housing.
• Global energy prices are becoming an additional inflation risk. Middle East tensions and disruptions to energy supplies have pushed oil prices higher, while China’s suspension of fuel exports in October has added pressure to Asian fuel markets. Higher energy costs could keep Australian inflation elevated and make it harder for the RBA to ease policy.
• The next meeting is on 2-3 November 2026.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

Employment Change q/q (9:45 pm GMT)

Unemployment Rate (9:45 pm GMT)

What can we expect from the NZD today?

The New Zealand dollar remains under pressure following the RBNZ’s unexpected decision to hold interest rates at 2.75%. Although the possibility of a December rate hike offers some support, uncertainty surrounding monetary policy and the domestic economic recovery continues to limit demand for the currency.

Today’s employment report will be particularly important. Stronger employment growth and a declining unemployment rate could help the NZD recover, while disappointing figures could reinforce bearish sentiment.

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

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news event

What can we expect from the JPY today?

The Japanese yen has a potentially supportive outlook following increasingly hawkish signals from the Bank of Japan. Expectations of a December interest-rate increase to 1.50%, together with persistent inflation pressures and the possibility of further monetary tightening, could support the currency.

However, the yen still faces pressure from the interest-rate difference between Japan and the United States. Meanwhile, Japanese authorities remain prepared to intervene if currency movements become excessive.

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

Medium Bullish

Oil

Key news events today

API Crude Oil Stock (8:30 pm GMT)

What can we expect from the Oil today?

Oil prices experienced a sharp decline on Monday as hopes of a US-Iran diplomatic agreement reduced concerns about supply disruptions. However, reports of a US strike on Iran’s Qeshm Island have brought geopolitical risks back into focus, creating renewed uncertainty over Middle Eastern oil supplies. Brent is trading around $104–$105, while WTI is around $96–$97 in early Tuesday reports. OPEC+ maintaining its December production targets provides some stability, but the Strait of Hormuz remains a major concern.

Next 24 Hours Bias
Medium Bullish

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