IC – Asia Fundamental Forecast | 13 October 2026

IC – Asia Fundamental Forecast | 13 October 2026

What happened in the U.S. session?

Oil prices rose because of Middle East supply concerns, helping push the U.S. dollar toward an 18-month high as inflation and interest-rate worries increased. Gold weakened, while U.S. stocks ended mixed, with energy shares supported and some technology stocks under pressure. Traders should watch oil and geopolitical headlines, dollar strength, and Wednesday’s U.S. CPI release for the next major market direction.

What does it mean for the Asia Session?

Asian traders should focus on the U.S. dollar, Middle East tensions, oil prices, and Australian economic updates. A stronger dollar and rising oil prices could put pressure on Asian currencies, gold, and regional stocks. The RBA minutes and Japan’s producer price data may create additional volatility. China’s upcoming inflation and trade figures, along with U.S. inflation data later this week, will be key drivers of broader market direction.
​
The Dollar Index (DXY)

Key news events today

No major news event

What can we expect from the DXY today?

The US dollar remains bullish, trading near an 18-month high as Middle East tensions, rising oil prices, and expectations of higher interest rates support demand. On Tuesday, traders should watch Fed comments, small-business confidence, and existing home sales. However, Wednesday’s US inflation report is likely to be the main short-term catalyst. Strong inflation could push the dollar higher, while weaker figures could trigger a pullback.

Central Bank Notes:

• The Federal Open Market Committee (FOMC) raised the federal funds target range by 25 basis points to 3.75%–4.00% at its September 15–16, 2026, meeting. The decision was approved unanimously by a 12–0 vote, marking a shift from the July meeting, when rates were held at 3.50%–3.75%. The Fed said the move was intended to support its dual mandate and promote a more timely return of inflation toward its 2% objective.
• The labor market remains relatively resilient. The September FOMC statement said job gains have kept pace with workforce growth and that the unemployment rate has changed little. The Fed continues to monitor employment conditions closely alongside inflation when determining the appropriate path for monetary policy.
• Inflation remains above the Federal Reserve’s 2% target and continues to be a key policy concern. The September decision explicitly noted that inflation remains elevated. The latest projections put median headline PCE inflation at 3.7% for 2026, before falling to 2.3% in 2027, 2.1% in 2028, and 2.0% in 2029. Core PCE inflation is projected at 3.4% in 2026, declining to 2.5% in 2027 and 2.2% in 2028.
• Economic activity continues to expand at a solid pace. The Fed highlighted resilient domestic spending, strong productivity growth, and robust capital investment, although uncertainty remains elevated partly because of geopolitical developments. The September projections raised the median 2026 GDP-growth forecast to 2.3%, compared with 2.2% in the June projections.
• The September projections show a higher expected policy-rate path than in June. The median projection for the federal funds rate is now 4.1% at the end of 2026, compared with 3.8% in the June projections. The median is projected at 4.1% in 2027, 3.9% in 2028, and 3.6% in 2029. This indicates that policymakers’ projected rate path remains relatively restrictive while inflation is expected to move gradually toward the target.
• Chair Kevin Warsh continues to emphasize the importance of returning inflation to 2%. Ahead of the September meeting, Warsh indicated that the Fed would have further work to do if policymakers could not gain sufficient confidence that inflation was moving toward the 2% objective. The September decision subsequently delivered a 25-basis-point hike, while the Committee continued to emphasize its assessment of incoming economic data and risks.
• The September economic projections show a more balanced growth outlook but continued inflation risks. The median unemployment forecast is 4.1% for 2026 and 2027, while the Fed projects GDP growth of 2.3% in 2026 and 2.4% in 2027. At the same time, PCE inflation is expected to remain substantially above target through 2026 before moving closer to 2% over subsequent years.
• The next meeting is scheduled for 27 to 28 October 2026.

Next 24 Hours Bias

Medium Bullish 

Gold (XAU)

Key news events today

No major news event

What can we expect from the Gold today?

Gold is facing short-term pressure from a strong U.S. dollar, elevated bond yields, and uncertainty about the Fed’s next move. Geopolitical tensions and central-bank demand are providing some support. Gold could remain volatile, with traders watching the dollar, Treasury yields, and positioning ahead of Wednesday’s U.S. inflation report. A weaker dollar and falling yields could help gold recover, while further dollar strength could lead to more losses.

Next 24 Hours Bias
Medium 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 trying to recover, but the strong US dollar and Middle East tensions remain major risks. Today’s key event is the RBA meeting minutes, which could provide clues about further rate hikes. Traders should also watch the Australian business survey and upcoming Chinese and US inflation data.

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 Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news event

What can we expect from the NZD today?

The New Zealand dollar remains under pressure as the U.S. dollar strengthens amid geopolitical uncertainty. Expectations of another RBNZ rate hike and strong agricultural exports could help the Kiwi recover, but traders are still cautious. The short-term outlook is tilted bearish for NZD/USD unless the U.S. dollar weakens or New Zealand’s inflation outlook pushes interest-rate expectations higher.

Central Bank Notes:

• The Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate (OCR) by 25 basis points to 2.75% at its 2 September 2026 Monetary Policy Statement meeting. The decision was reached by consensus, marking another step in the bank’s tightening cycle as policymakers seek to bring inflation sustainably back toward the 2% midpoint.
• Inflation remains the key reason behind the RBNZ’s tightening stance. Annual consumer inflation increased to 4.1% in the June 2026 quarter, driven largely by higher fuel prices associated with the Middle East conflict. The RBNZ expects inflation to remain above 3% for the remainder of 2026 before returning to the 1–3% target range next year and moving toward the 2% midpoint.
• Energy prices and geopolitical developments remain an important upside risk to inflation. Higher petrol and diesel prices have increased transportation and production costs, feeding into prices for goods and services such as food and air travel. The RBNZ remains concerned that renewed increases in energy prices could make inflation more persistent than currently expected.
• The RBNZ indicated that further OCR increases may still be required this year, but policy is not on a predetermined path. Future decisions will depend on the balance of risks to medium-term inflation, including inflation expectations, domestic price pressures, economic activity, and the response of households and businesses to tighter financial conditions.
• New Zealand’s economic recovery appears to have resumed, although growth remains uneven. Economic activity was lackluster during the June quarter as higher fuel costs reduced household purchasing power. However, stronger export prices and resilient demand from trading partners are supporting income growth and investment, particularly in export-oriented sectors.
• Household demand and the housing market remain areas of weakness. Weak income growth, job insecurity, and relatively flat house prices continue to weigh on household spending and residential investment, particularly in Auckland and Wellington. The RBNZ nevertheless expects the recovery to strengthen gradually as inflation declines and purchasing power improves.
• The labor market remains relatively soft, but the bank expects conditions to improve as economic activity strengthens. High unemployment and subdued household demand remain a concern, but stronger economic growth should gradually encourage businesses to increase hiring. This creates a delicate balance for the RBNZ between containing inflation and avoiding unnecessary weakness in employment and output.
• The RBNZ continues to see strong export performance as an important support for the economy. New Zealand’s agricultural and other export sectors are benefiting from resilient global demand and strong commodity prices, helping offset weakness in domestic consumption and residential investment.
• The next meeting is on 28 October 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 faces continued downward pressure from a strong U.S. dollar, high oil prices, and uncertainty about future BOJ rate hikes. However, intervention warnings from Japanese authorities could trigger a sudden yen rebound. Traders should watch U.S. inflation data, Treasury yields, BOJ policy signals, and developments in the Middle East.

Central Bank Notes:

• The BOJ raised its policy rate by 25 basis points to 1.25% at its September 17–18 meeting, the highest level in 31 years. The decision passed 7–2.
• The BOJ said underlying inflation remains firm and is increasingly consistent with its 2% price-stability target, supported by wage growth and services prices.
• Further rate hikes remain possible, but the BOJ will continue to assess wage growth, inflation, economic activity, and financial-market conditions before making additional adjustments.
• The bank continues its gradual reduction of Japanese government bond purchases while retaining flexibility to respond if market volatility becomes excessive.
• Japan’s economy continues to expand moderately, supported by domestic demand and business investment, although global trade uncertainty, geopolitical risks, and higher energy costs remain important risks.
• Yen weakness remains a key concern, as depreciation can increase imported inflation. The BOJ is closely monitoring exchange-rate movements and their impact on prices and financial conditions.
• Governor Kazuo Ueda signaled that the September hike reflects growing confidence that inflation is becoming more sustainable, while the two dissenting members preferred to wait before tightening further.
• Looking ahead: The BOJ remains on a gradual normalization path. Future hikes will depend mainly on inflation, wages, domestic demand, and financial conditions rather than a fixed timetable.
• The next meeting is on 29 to 30 October 2026.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

API Crude Oil Stock (8:30 pm GMT)

What can we expect from the Oil today?

Middle East tensions, tanker attacks, and shipping disruptions are supporting Brent and WTI, while OPEC’s weaker demand forecast and the possibility of additional Russian fuel supplies could limit gains. For Tuesday, traders should watch geopolitical headlines closely and avoid assuming that prices will continue rising without confirmation.

Next 24 Hours Bias
Strongly Bullish

Risk Warning: Trading in securities involves significant risk. Prices may fluctuate and securities can become entirely valueless. You may incur losses that exceed your potential profits, and in some cases, losses may exceed the amount you have deposited. Securities, futures, options, and contracts for differences are complex financial instruments and are not suitable for all investors. Engaging in such transactions requires a sound understanding of the associated risks. Please read and ensure you fully understand our Risk Disclosure.

Our leverage is dynamic and may change at any time. Such changes may affect your positions and margin requirements. You are responsible for monitoring your positions and maintaining sufficient margin at all times.