{"id":88056,"date":"2026-07-16T18:14:51","date_gmt":"2026-07-16T08:14:51","guid":{"rendered":"https:\/\/ic.com\/blog\/?p=88056"},"modified":"2026-07-16T18:15:37","modified_gmt":"2026-07-16T08:15:37","slug":"ic-asia-fundamental-forecast-16-july-2026","status":"publish","type":"post","link":"https:\/\/ic.com\/blog\/ic-asia-fundamental-forecast-16-july-2026\/","title":{"rendered":"IC &#8211; Asia Fundamental Forecast | 16 July 2026"},"content":{"rendered":"\n<p><strong>IC &#8211; Asia Fundamental Forecast | 16 July 2026<\/strong><\/p>\n\n\n\n<p><strong>What happened in the U.S. session?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>Investor sentiment improved after fresh U.S. inflation data showed further signs of easing price pressures. June Producer Price Index (PPI) unexpectedly fell by 0.3% m\/m, the largest monthly decline in 14 months, mainly due to lower energy costs, reinforcing the softer CPI report released a day earlier. The data reduced expectations of an imminent Federal Reserve rate hike, while New York Fed President John Williams stated that current interest rates remain appropriately restrictive and suggested there is no need for a rate increase at the upcoming July FOMC meeting.<br \/><br \/><strong>What does it mean for the Asia Session?<\/strong><br \/><br \/>The session begins with the UK monthly GDP report, where economists expect the economy to show 0.0% month-on-month growth after a 0.1% contraction previously. A stronger-than-expected reading could provide support for the British pound, while another weak or negative print would reinforce concerns about slowing UK economic activity. Meanwhile, market sentiment also remains influenced by China&#8217;s weaker-than-expected second-quarter GDP data released earlier this week, increasing expectations that Beijing may introduce further targeted stimulus measures to support 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>Core Retail Sales m\/m (12:30 pm GMT)<br \/><br \/>Philly Fed Manufacturing Index (12:30 pm GMT)<br \/><br \/>Retail Sales m\/m (12:30 pm GMT)<br \/><br \/>Unemployment Claims (12:30 pm)<br \/><br \/><strong>What can we expect from DXY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The U.S. dollar enters Thursday under pressure after weaker-than-expected June inflation data reduced expectations of another near-term Federal Reserve interest rate hike. Softer CPI and PPI figures have prompted investors to scale back hawkish Fed bets, causing the dollar to retreat against most major currencies. Although Fed Chair Kevin Warsh and other policymakers continue to emphasize that inflation remains above the 2% target and that policy will remain data-dependent, markets are now focused on whether incoming economic data can revive expectations of tighter monetary policy.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul>\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 inflation, employment, and economic growth data. 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 July 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Medium Bullish<\/p>\n\n\n\n<p><strong>Gold (XAU)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>Core Retail Sales m\/m (12:30 pm GMT)<br \/><br \/>Philly Fed Manufacturing Index (12:30 pm GMT)<br \/><br \/>Retail Sales m\/m (12:30 pm GMT)<br \/><br \/>Unemployment Claims (12:30 pm))<\/p>\n\n\n\n<p><strong>What can we expect from Gold today?<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/www.tradingview.com\/symbols\/XAUUSD\/?exchange=ICMARKETS\" title=\"\">Gold<\/a> traded with a cautious tone as investors balanced softer U.S. inflation data against ongoing geopolitical risks and uncertainty over the Federal Reserve&#8217;s next policy move. Lower-than-expected U.S. Producer Price Index (PPI) data and easing Treasury yields have reduced expectations of further near-term Fed tightening, while a weaker U.S. dollar has provided some underlying support for bullion. However, comments from New York Fed President John Williams that inflation remains &#8220;too high,&#8221; despite showing signs of easing, reinforced the Fed&#8217;s data-dependent approach and limited stronger gains in gold.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><br \/>Weak Bearish<\/p>\n\n\n\n<p><strong>The Australian Dollar (AUD)<\/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 AUD today?<\/strong><\/p>\n\n\n\n<p>The Australian dollar (AUD) enters Thursday, with sentiment remaining mixed as traders balance supportive domestic fundamentals against external risks. The Reserve Bank of Australia (RBA) continues to maintain a relatively hawkish stance after holding the cash rate at 4.35% in June, with inflation still running at 4.0%, well above the Bank&#8217;s 2\u20133% target. Markets remain focused on Australia&#8217;s upcoming June-quarter CPI release later this month, which is expected to determine whether the RBA delivers another rate hike in August. Rising energy prices caused by ongoing Middle East tensions have reinforced concerns that inflation could remain elevated, prompting several economists to forecast further policy tightening if price pressures persist.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul>\n<li>The Reserve Bank of New Zealand&#8217;s Monetary Policy Committee (MPC) raised the Official Cash Rate (OCR) by 25 basis points to 2.50% at its 8 July 2026 Monetary Policy Review, marking the first rate increase of the current tightening cycle. Unlike the split decision in May, the Committee reached a consensus that reducing monetary stimulus was appropriate to return inflation to target.<\/li>\n\n\n\n<li>Although global oil prices have fallen following the partial reopening of the Strait of Hormuz, the RBNZ warned that inflation remains above its 1\u20133% target range and that lingering energy-related cost pressures continue to pose upside risks. The Bank reiterated that further OCR increases are likely, although the timing will remain dependent on incoming economic data.<\/li>\n\n\n\n<li>The RBNZ now expects headline inflation to have peaked at 3.9% in Q2 2026, lower than the 4.3% peak projected in May, reflecting weaker oil prices. Inflation is forecast to ease to around 3.3% in Q3 2026 before gradually returning to the 2% midpoint by mid-2027, while underlying domestic inflation remains persistent.<\/li>\n\n\n\n<li>The Committee judged that the current OCR remains accommodative, even after the July increase, and stated that additional tightening will probably be required over coming meetings. Policymakers emphasized that future decisions will depend on inflation expectations, firms&#8217; pricing behaviour, labour market conditions, and the pace of economic recovery rather than following a predetermined path.<\/li>\n\n\n\n<li>Economic activity slowed during the June quarter as higher energy costs temporarily weighed on demand, but the RBNZ expects the recovery to resume in the September quarter. The Bank&#8217;s Kiwi-GDP nowcasting model projects 0.6% quarterly GDP growth in Q3 2026, supported by improving business confidence, lower fuel prices, and stronger household purchasing power as inflation moderates.<\/li>\n\n\n\n<li>External conditions remained mixed, with elevated global energy price volatility and geopolitical risks supporting upside inflation risks, while softer demand from key trading partners\u2014especially China\u2014continued to weigh on Australian export momentum.<\/li>\n\n\n\n<li>Financial markets now broadly expect the RBA to hold rates at 4.35% through the third quarter, with the probability of further tightening slightly reduced but still present if services inflation or wage data re-accelerate.<\/li>\n\n\n\n<li>The July statement emphasized a continued \u201cdata-dependent and patient\u201d approach, signaling that policy will remain restrictive for longer if inflation proves persistent, while avoiding any commitment to near-term easing despite slower growth signals.<\/li>\n\n\n\n<li>The next meeting is on 4 to 5 August 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak Bearish<\/p>\n\n\n\n<p><strong>The Kiwi Dollar (NZD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>No major news event<\/p>\n\n\n\n<p><strong>What can we expect from NZD today?<\/strong><\/p>\n\n\n\n<p>The New Zealand dollar (NZD) remains well supported after last week&#8217;s hawkish Reserve Bank of New Zealand (RBNZ) rate hike and continued guidance that further policy tightening may be needed if inflation pressures persist. Recent comments from RBNZ Chief Economist Paul Conway reinforced concerns that businesses are passing higher costs on to consumers more readily, increasing the risk of persistent inflation despite easing oil prices. This has strengthened market expectations that the central bank will maintain a restrictive stance, helping the Kiwi outperform several of its major peers.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul>\n<li>The Reserve Bank of New Zealand&#8217;s Monetary Policy Committee (MPC) raised the Official Cash Rate (OCR) by 25 basis points to 2.50% at its 8 July 2026 Monetary Policy Review, marking the first rate increase of the current tightening cycle. Unlike the split decision in May, the Committee reached a consensus that reducing monetary stimulus was appropriate to return inflation to target.<\/li>\n\n\n\n<li>Although global oil prices have fallen following the partial reopening of the Strait of Hormuz, the RBNZ warned that inflation remains above its 1\u20133% target range and that lingering energy-related cost pressures continue to pose upside risks. The Bank reiterated that further OCR increases are likely, although the timing will remain dependent on incoming economic data.<\/li>\n\n\n\n<li>The RBNZ now expects headline inflation to have peaked at 3.9% in Q2 2026, lower than the 4.3% peak projected in May, reflecting weaker oil prices. Inflation is forecast to ease to around 3.3% in Q3 2026 before gradually returning to the 2% midpoint by mid-2027, while underlying domestic inflation remains persistent.<\/li>\n\n\n\n<li>The Committee judged that the current OCR remains accommodative, even after the July increase, and stated that additional tightening will probably be required over coming meetings. Policymakers emphasized that future decisions will depend on inflation expectations, firms&#8217; pricing behaviour, labour market conditions, and the pace of economic recovery rather than following a predetermined path.<\/li>\n\n\n\n<li>Economic activity slowed during the June quarter as higher energy costs temporarily weighed on demand, but the RBNZ expects the recovery to resume in the September quarter. The Bank&#8217;s Kiwi-GDP nowcasting model projects 0.6% quarterly GDP growth in Q3 2026, supported by improving business confidence, lower fuel prices, and stronger household purchasing power as inflation moderates.<\/li>\n\n\n\n<li>Domestic demand remains uneven, with tourism, agriculture, and export industries continuing to outperform, while discretionary retail spending, construction, and housing activity remain subdued. The RBNZ believes spare capacity in the economy should limit widespread pass-through of higher business costs into consumer prices, although this remains an important upside inflation risk.<\/li>\n\n\n\n<li>Financial conditions have eased since the May meeting as wholesale interest rates declined, and the New Zealand dollar depreciated, helping exporters but potentially adding to imported inflation. The Committee noted that shorter-term mortgage rates had increased earlier in the year, while longer-term borrowing costs have begun to stabilize alongside lower market interest-rate expectations.<\/li>\n\n\n\n<li>The MPC concluded that maintaining price stability remains its primary objective, stressing that while further rate increases are expected, policy will remain data-dependent. The Committee believes returning inflation to the 2% midpoint is essential to achieving a sustainable recovery in employment, household incomes, and long-term economic growth.<\/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><\/p>\n\n\n\n<p>Medium Bullish<\/p>\n\n\n\n<p><strong>The Japanese Yen (JPY)<\/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 JPY today?<br \/><br \/><\/strong>The Japanese yen remains under pressure despite the Bank of Japan&#8217;s recent decision to raise its policy rate to 1.00%, the highest level since 1995. Investors continue to focus on the wide interest-rate differential between Japan and the United States, which has kept <a href=\"https:\/\/www.tradingview.com\/symbols\/USDJPY\/?exchange=ICMARKETS\" title=\"\">USD\/JPY<\/a> trading near multi-decade highs. Markets remain skeptical that the BoJ will tighten policy aggressively beyond the recent hike, while concerns over potential intervention by Japan&#8217;s Ministry of Finance persist as the yen trades around levels that previously prompted official action.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul>\n<li>The Policy Board of the Bank of Japan maintained the short-term policy rate at 0.75% at the 15\u201316 June 2026 meeting, in line with market expectations, while reiterating a cautious and data-dependent approach to further policy normalization amid mixed domestic and external conditions.<\/li>\n\n\n\n<li>The BOJ continues to target the uncollateralized overnight call rate around 0.75%, with policymakers signaling that any move toward 1.0% will depend on sustained wage growth, inflation durability above target, stable financial conditions, and limited downside risks to growth rather than a fixed tightening schedule.<\/li>\n\n\n\n<li>JGB purchase tapering remains on track, with monthly bond buying continuing to moderate under the previously announced framework. The BOJ maintains flexibility to intervene or temporarily adjust purchase operations if sharp volatility emerges in the Japanese government bond market or if excessive yen fluctuations threaten financial stability.<\/li>\n\n\n\n<li>Japan\u2019s economy shows moderate but uneven growth heading into mid-2026, supported by resilient domestic demand, corporate investment, and recovering external activity, although weaker global manufacturing momentum and geopolitical tensions continue to weigh on the export outlook.<\/li>\n\n\n\n<li>Core CPI (excluding fresh food) remains near the mid-1% y\/y range, while underlying inflation indicators, including core-core measures and services inflation, continue to hover around or above 2%, supported by stronger wage dynamics and pass-through effects from prior cost increases.<\/li>\n\n\n\n<li>Domestic inflation pressures remain supported by 2026 Shunto wage settlements near 5%, labor shortages, and firm services pricing. However, easing import costs and stabilizing commodity prices are helping moderate headline inflation, while risks persist from renewed energy volatility and yen depreciation.<\/li>\n\n\n\n<li>Near-term real GDP growth may remain below trend, reflecting the lagged impact of tighter financial conditions and external uncertainty, but rising household incomes, accommodative real rates, and fiscal support measures are expected to gradually support consumption and business investment.<\/li>\n\n\n\n<li>Over the medium term, the BOJ continues to expect that labor-market tightness, wage growth, and structural productivity improvements will help sustain inflation around the 2% target, leaving room for a gradual move toward 1.0% policy rates into late-2026 or 2027, provided inflation and economic momentum remain aligned.<\/li>\n\n\n\n<li>The next meeting is on 30 to 31 July 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak Bearish<\/p>\n\n\n\n<p><strong>Oil<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>No major news event<\/p>\n\n\n\n<p><strong>What can we expect from Oil today?<\/strong><\/p>\n\n\n\n<p>Oil prices remain under pressure heading into Thursday, as traders weigh easing supply concerns against persistent geopolitical risks. Despite renewed U.S.-Iran military tensions and additional strikes around the Strait of Hormuz, the market reaction has been muted, with Brent and WTI falling after U.S. crude inventories posted a smaller-than-expected draw, suggesting supply remains more stable than feared.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Weak Bearish<\/p>\n\n\n\n<p><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=\"noreferrer noopener\">Risk Disclosure<\/a>.<\/p>\n\n\n\n<p>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 | 16 July 2026 What happened [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":84953,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[196,215,339],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/posts\/88056"}],"collection":[{"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/comments?post=88056"}],"version-history":[{"count":2,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/posts\/88056\/revisions"}],"predecessor-version":[{"id":88087,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/posts\/88056\/revisions\/88087"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/media\/84953"}],"wp:attachment":[{"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/media?parent=88056"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/categories?post=88056"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/tags?post=88056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}