{"id":76326,"date":"2026-10-07T18:54:06","date_gmt":"2026-10-07T07:54:06","guid":{"rendered":"https:\/\/www.icmarkets-vnn.com\/blog\/?p=76326"},"modified":"2026-10-07T18:54:09","modified_gmt":"2026-10-07T07:54:09","slug":"ic-asia-fundamental-forecast-07-october-2026","status":"publish","type":"post","link":"https:\/\/www.icmarkets-vnn.com\/blog\/ic-asia-fundamental-forecast-07-october-2026\/","title":{"rendered":"IC &#8211; Asia Fundamental Forecast | 07 October 2026"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>IC &#8211; Asia Fundamental Forecast | 07 October 2026<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What happened in the U.S. session?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>A tug-of-war between elevated inflation\/fiscal concerns and growing expectations that the Fed may not raise rates in October. The wider-than-expected $105.6 billion U.S. trade deficit and historically high Treasury borrowing costs highlighted underlying economic and fiscal pressures, but falling Treasury yields and easing oil prices provided relief to risk assets. That combination helped push the S&amp;P 500 and Nasdaq to record highs, while gold benefited from lower yields and a softer dollar. Oil remained highly sensitive to Middle Eastern supply developments, the planned G7 reserve release, and geopolitical risks.<br \/><br \/><strong>What does it mean for the Asia Session?<\/strong><br \/><br \/>Japan&#8217;s stronger real wages and improving manufacturing sentiment will keep attention on the yen and the possibility of further BOJ tightening. Meanwhile, China remains closed, potentially reducing regional liquidity, while oil near $100 and fragile Middle Eastern supply conditions remain an important inflation risk. Later in the global session, the Fed minutes could trigger a larger move in the dollar, Treasury yields, gold, and equity futures.<br \/>\u200b<br \/><strong>The Dollar Index (DXY)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">FOMC Meeting Minutes (6:00 pm GMT)<br \/><br \/><strong>What can we expect from the DXY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The sharp slowdown in U.S. job creation, which has reduced expectations for an October Fed rate hike and pushed Treasury yields lower. The dollar&#8217;s recent rally has therefore stalled, with the DXY slipping back toward the 102 area. The September FOMC minutes at 18:00 GMT are the main event for USD traders today: a hawkish message suggesting officials still want further rate hikes could revive the dollar, while confirmation that policymakers are becoming more cautious would likely put further downward pressure on USD and support EUR\/USD, GBP\/USD and gold.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Federal Open Market Committee (FOMC) raised the federal funds target range by 25 basis points to 3.75%\u20134.00% at its September 15\u201316, 2026, meeting. The decision was approved unanimously by a 12\u20130 vote, marking a shift from the July meeting, when rates were held at 3.50%\u20133.75%. The Fed said the move was intended to support its dual mandate and promote a more timely return of inflation toward its 2% objective.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>Inflation remains above the Federal Reserve&#8217;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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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&#8217; projected rate path remains relatively restrictive while inflation is expected to move gradually toward the target.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>The next meeting is scheduled for 27 to 28 October 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Strongly Bullish&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Gold (XAU)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><br \/><br \/>FOMC Meeting Minutes (6:00 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the Gold today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Gold is showing a bullish recovery today, supported by falling Treasury yields, a softer dollar, lower oil prices, and reduced expectations for an October Fed rate hike. However, the rebound is not yet a clear trend reversal because U.S. yields remain historically high and the dollar continues to exert pressure. For traders, $4,100 is the key downside area to watch, while sustained moves above $4,200 would strengthen the case for further upside. The upcoming FOMC minutes are particularly important because they could provide fresh clues about the Fed&#8217;s interest-rate path and consequently gold&#8217;s next major move.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><br \/>Strongly Bearish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Australian Dollar (AUD)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No major news event<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the AUD today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The combination of Australia&#8217;s high 4.60% cash rate, sticky inflation, elevated domestic bond yields, and a softer U.S. dollar is supporting the AUD. AUD\/USD is now close to the psychologically important 0.7000\u20130.7010 resistance zone, making a sustained break above that area an important signal for traders. At the same time, the main risks are a renewed rise in U.S. Treasury yields\/USD, weaker Chinese economic sentiment once China&#8217;s holiday ends, and concerns that Australia&#8217;s high interest rates are beginning to weaken domestic demand.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>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.<\/li>\n\n\n\n<li>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\u2019s 2\u20133% target.<\/li>\n\n\n\n<li>The labor market is cooling but remains relatively resilient. Australia&#8217;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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>Economic growth remains positive but subdued. Australia&#8217;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.<\/li>\n\n\n\n<li>Global energy prices are becoming an additional inflation risk. Middle East tensions and disruptions to energy supplies have pushed oil prices higher, while China&#8217;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.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The next meeting is on 2-3 November 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Strongly Bearish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Kiwi Dollar (NZD)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><br \/><br \/>No major news event<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the NZD today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Stronger business confidence and increasing expectations of another RBNZ rate hike are providing support, but the Kiwi remains close to multi-month lows because the U.S. dollar and global bond yields are still exerting significant downward pressure. NZD\/USD is around 0.5600, while the NZ trade-weighted index has weakened to 63.77.<br \/><br \/>The key themes to watch are RBNZ rate expectations, U.S. yields\/USD, Chinese economic data, and New Zealand&#8217;s upcoming election. A sustained break higher in NZD\/USD would likely require either a softer U.S. dollar\/lower yields or a further hawkish repricing of the RBNZ.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>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&#8217;s tightening cycle as policymakers seek to bring inflation sustainably back toward the 2% midpoint.<\/li>\n\n\n\n<li>Inflation remains the key reason behind the RBNZ&#8217;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\u20133% target range next year and moving toward the 2% midpoint.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>New Zealand&#8217;s economic recovery appears to have resumed, although growth remains uneven. Economic activity was lacklustre 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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>The RBNZ continues to see strong export performance as an important support for the economy. New Zealand&#8217;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.<\/li>\n\n\n\n<li>The next meeting is on 28 October 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Strongly Bearish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Japanese Yen (JPY)<\/strong><strong><br \/><\/strong><strong><br \/><\/strong><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No major news event<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the JPY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>USD\/JPY remains around \u00a5158, meaning the yen is still relatively weak, but the fundamental backdrop is changing. Governor Ueda&#8217;s latest comments reinforce expectations that the BOJ is entering a period of gradual monetary tightening, while reports that the central bank could acknowledge inflation has reached its 2% objective strengthen the case for another hike, potentially in December. At the same time, Japan and the U.S. remain alert to excessive yen depreciation, leaving intervention risk as an important ceiling on USD\/JPY.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The BOJ raised its policy rate by 25 basis points to 1.25% at its September 17\u201318 meeting, the highest level in 31 years. The decision passed 7\u20132.<\/li>\n\n\n\n<li>The BOJ said underlying inflation remains firm and is increasingly consistent with its 2% price-stability target, supported by wage growth and services prices.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>The Bank continues its gradual reduction of Japanese Government Bond purchases while retaining flexibility to respond if market volatility becomes excessive.<\/li>\n\n\n\n<li>Japan&#8217;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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>The next meeting is on 29 to 30 October 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Weak Bullish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Oil<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><br \/><br \/>EIA Crude Oil Inventories (2:30 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the Oil today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The main pressure on oil prices is coming from recovering Middle Eastern exports and a planned G7 emergency oil-reserve release, which are easing supply concerns.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the bullish outlook remains strong because global oil inventories are low, diesel supplies are tight, and the Middle East is still at risk of attacks and shipping disruptions. Higher EIA price forecasts also suggest the oil market remains tight.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Strongly Bullish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Risk Warning:<\/strong>&nbsp;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&nbsp;<a href=\"https:\/\/cdn.ic.com\/uploads\/FSA\/Risk_Disclosure_Notice_FSA.pdf\" target=\"_blank\" rel=\"noopener\">Risk Disclosure<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">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.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>IC &#8211; Asia Fundamental Forecast | 07 October 2026 What happened [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":74099,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[196,215,339],"tags":[],"class_list":["post-76326","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fundamental-analysis","category-market-analysis","category-recent-posts"],"_links":{"self":[{"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/posts\/76326","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/comments?post=76326"}],"version-history":[{"count":1,"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/posts\/76326\/revisions"}],"predecessor-version":[{"id":76327,"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/posts\/76326\/revisions\/76327"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/media\/74099"}],"wp:attachment":[{"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/media?parent=76326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/categories?post=76326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets-vnn.com\/blog\/wp-json\/wp\/v2\/tags?post=76326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}