{"id":88730,"date":"2026-08-05T16:46:21","date_gmt":"2026-08-05T06:46:21","guid":{"rendered":"https:\/\/ic.com\/blog\/?p=88730"},"modified":"2026-08-05T16:46:21","modified_gmt":"2026-08-05T06:46:21","slug":"ic-asia-fundamental-forecast-05-august-2026","status":"publish","type":"post","link":"https:\/\/ic.com\/blog\/ic-asia-fundamental-forecast-05-august-2026\/","title":{"rendered":"IC &#8211; Asia Fundamental Forecast | 05 August 2026"},"content":{"rendered":"\n<p><strong>IC &#8211; Asia Fundamental Forecast | 05 August 2026<\/strong><\/p>\n\n\n\n<p><strong>What happened in the U.S. session?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The U.S. session was dominated by positioning ahead of key labor and services-sector releases, with traders balancing signs of a resilient U.S. economy against the possibility that stronger data could delay Federal Reserve easing. The USD and Treasury yields remained the primary beneficiaries of stronger economic expectations, while gold faced pressure from rate uncertainty. Equity markets maintained a cautious tone as investors awaited clearer signals from ADP employment and ISM Services data on the next direction for monetary policy.<br \/><br \/><strong>What does it mean for the Asia Session?<\/strong><br \/><br \/>Wednesday\u2019s Asian session will likely be driven by positioning ahead of the U.S. ADP employment report and ISM Services PMI, with traders looking for clues about labor-market strength, economic momentum, and the Fed\u2019s next policy move. A stronger-than-expected data outcome could boost the dollar, pressure gold, and weigh on risk assets, while weaker results could revive expectations of easier monetary policy and support precious metals and higher-beta currencies. Meanwhile, oil markets and geopolitical developments will remain important sources of volatility across global markets.<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>ADP Non-Farm Employment Change (12:15 pm GMT)<br \/><br \/>ISM Services PMI (12:15 pm GMT)<br \/><br \/><strong>What can we expect from DXY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The dollar has recently been supported by stronger-than-expected manufacturing data, with the ISM Manufacturing PMI rising to 55.6, its highest level since 2022, reinforcing the view that the U.S. economy remains resilient despite elevated interest rates. Today&#8217;s ADP employment report and ISM Services PMI are expected to be the next major catalysts for the greenback. A stronger-than-expected ADP reading, combined with an ISM Services PMI above consensus, would likely strengthen the U.S. dollar by reinforcing expectations that the Fed can maintain its hawkish stance.<\/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) kept the federal funds rate unchanged at 3.50%\u20133.75% at its July 28\u201329, 2026, meeting, marking the fifth consecutive meeting without a policy change. The Committee voted 9\u20133 to maintain rates, with three members dissenting in favor of a 25-basis-point rate hike, highlighting growing concern among some policymakers that inflation remains too high.<\/li>\n\n\n\n<li>The Committee reaffirmed its dual mandate of maximum employment and price stability. Officials noted that the labor market remains resilient, with job gains broadly keeping pace with labor force growth and the unemployment rate remaining relatively stable. The FOMC continues to view employment conditions as consistent with a healthy economy while remaining vigilant for signs of labor market weakening.<\/li>\n\n\n\n<li>Inflation remains the Committee&#8217;s primary concern. While some recent inflation data have shown moderation, overall price pressures remain above the Fed&#8217;s 2% target. Policymakers emphasized that elevated inflation continues to be driven in part by higher energy prices and persistent supply-side pressures, leading the Committee to maintain a restrictive monetary policy stance.<\/li>\n\n\n\n<li>Economic activity continues to expand at a solid pace despite elevated uncertainty. Strong productivity growth, business investment, and continued spending related to artificial intelligence remain supportive of economic growth. However, the FOMC acknowledged that geopolitical tensions, particularly developments affecting global energy markets, continue to pose risks to both inflation and the broader economic outlook.<\/li>\n\n\n\n<li>The July meeting highlighted increasing divisions within the Committee. Three policymakers\u2014Beth Hammack, Neel Kashkari, and Lorie Logan\u2014voted against the majority, preferring an immediate rate increase. This unusually large number of dissents reflects growing concern among some officials that inflation could remain persistent and may require additional policy tightening if progress stalls.<\/li>\n\n\n\n<li>Chair Kevin Warsh reiterated that future policy decisions will remain strictly data-dependent. He avoided providing explicit forward guidance, emphasizing that upcoming decisions will depend on incoming inflation, employment, and growth data. Warsh also stressed that the Committee remains fully committed to returning inflation to its 2% objective and is prepared to act if inflationary pressures intensify.<\/li>\n\n\n\n<li>The FOMC continues its balance sheet normalization program without changes. The Federal Reserve will maintain Treasury runoff caps at $5 billion per month and agency mortgage-backed securities (MBS) runoff caps at $35 billion per month, while continuing to ensure ample reserves remain available within the banking system.<\/li>\n\n\n\n<li>The next meeting is scheduled for 15 to 16 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>Gold (XAU)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>ADP Non-Farm Employment Change (12:15 pm GMT)<br \/><br \/>ISM Services PMI (12:15 pm GMT)<\/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> is in a data-driven environment as traders await the U.S. ADP Employment Change and ISM Services PMI reports. The precious metal has found support from falling oil prices, easing inflation expectations, and ongoing geopolitical uncertainty, but upside momentum remains limited by stronger U.S. economic data that has increased the likelihood of another Federal Reserve rate hike. If today&#8217;s ADP and ISM figures come in weaker than expected, gold could rally on expectations of a less aggressive Fed. Conversely, stronger-than-forecast readings would likely strengthen the U.S. dollar and Treasury yields, placing renewed downward pressure on gold ahead of Friday&#8217;s crucial Non-Farm Payrolls report.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><br \/>Strong 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 is trading with a cautiously positive tone as markets continue to assess Australia\u2019s resilient domestic economy, shifting Reserve Bank of Australia (RBA) expectations, and global risk sentiment. Recent Australian data showed stronger-than-expected household spending, with June consumption rising 0.8% and annual spending growth reaching 6%, suggesting that consumers remain resilient despite elevated interest rates. This strength has supported expectations that the RBA may maintain a restrictive policy stance for longer, although softer inflation data has reduced the urgency for further rate increases.<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, especially China, continued 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 Bullish<\/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 is starting Wednesday on relatively firm footing as improving market risk appetite and expectations that the Reserve Bank of New Zealand will keep monetary policy restrictive continue to support the currency. Nevertheless, traders remain cautious ahead of key U.S. economic releases later today, particularly the ADP Employment Change and ISM Services PMI, which are expected to dictate the next move in NZD\/USD. Strong U.S. data would likely boost the dollar and weigh on the kiwi, while softer-than-expected figures could extend NZD&#8217;s recent recovery against the greenback.&nbsp;<\/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>Weak Bearish<\/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 is trading with a cautiously bullish bias in the short term as intervention risks, stronger BOJ policy expectations, and safe-haven demand provide support. However, traders remain cautious because sustained yen strength will likely require continued policy tightening from the BOJ or a decline in U.S. yields. Key levels in <a href=\"https:\/\/www.tradingview.com\/symbols\/USDJPY\/?exchange=ICMARKETS\" title=\"\">USD\/JPY<\/a> remain important as markets evaluate whether the recent yen recovery is the beginning of a broader trend reversal or only a temporary correction following heavy intervention-driven volatility.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul>\n<li>The Bank of Japan (BOJ) maintained the short-term policy rate at 1.00% at its 30\u201331 July 2026 Monetary Policy Meeting. The decision reflected confidence that Japan&#8217;s economy continues to recover moderately, while policymakers judged that further tightening should proceed gradually as they assess incoming data and the sustainability of inflation.<\/li>\n\n\n\n<li>The BOJ continues to guide the uncollateralized overnight call rate at around 1.00%, emphasizing that future policy adjustments will remain data-dependent. The Bank reiterated that any additional rate increases will depend on sustained wage growth, inflation remaining durably around or above the 2% target, stable financial markets, and resilient domestic demand rather than following a predetermined path.<\/li>\n\n\n\n<li>The Bank will continue reducing its purchases of Japanese Government Bonds (JGBs) in line with its previously announced tapering plan while maintaining flexibility to conduct market operations if excessive volatility threatens financial stability. Policymakers also remain attentive to sharp movements in the yen and their potential impact on inflation and financial conditions.<\/li>\n\n\n\n<li>Japan&#8217;s economy continues to expand at a moderate pace, supported by firm domestic consumption, strong corporate investment, improving labor market conditions, and recovering global demand. However, uncertainty surrounding global trade, geopolitical developments, and external manufacturing activity continues to pose downside risks to the growth outlook.<\/li>\n\n\n\n<li>Underlying inflation continues to strengthen. While headline inflation has moderated somewhat due to easing energy prices, core inflation remains above the BOJ&#8217;s 2% objective, supported by broad-based services inflation, rising labor costs, and stronger pricing behavior among firms. The BOJ now sees upside risks to medium-term inflation from persistent wage growth and structural price-setting changes.<\/li>\n\n\n\n<li>Domestic inflationary pressures remain supported by robust wage settlements, persistent labor shortages, and continued pass-through of higher labor costs into services prices. At the same time, policymakers are closely monitoring the effects of yen depreciation, which could accelerate imported inflation if sustained, even as lower commodity and energy prices provide some offset.<\/li>\n\n\n\n<li>The BOJ expects real GDP growth to remain moderate over the near term as accommodative financial conditions, rising household incomes, and business investment continue to support activity. Nevertheless, policymakers acknowledge that tighter global financial conditions, weaker external demand, and geopolitical uncertainty could temporarily restrain growth.<\/li>\n\n\n\n<li>Looking ahead, the BOJ maintains that if inflation continues to stabilize around its 2% objective alongside sustained wage gains and economic expansion, further gradual policy normalization remains appropriate. Financial markets generally expect another 25-basis-point rate increase later in 2026, although the timing will depend on incoming economic and inflation data.<\/li>\n\n\n\n<li>The next meeting is on 17 to 18 September 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 \/>EIA Crude Oil Inventories (2:30 pm GMT)<\/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 on Wednesday, as traders weigh easing geopolitical tensions against an underlying tight global supply outlook. Optimism over potential improvements in Middle East shipping routes has reduced some of the recent risk premium, but Saudi Arabia continues to warn that global oil inventories remain low and could take considerable time to rebuild. Attention now turns to today&#8217;s U.S. ADP Employment Change and ISM Services PMI, along with upcoming U.S. crude inventory data, as stronger economic figures could support oil through improved demand expectations, while weaker data may add to downside pressure.<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 | 05 August 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\/88730"}],"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=88730"}],"version-history":[{"count":2,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/posts\/88730\/revisions"}],"predecessor-version":[{"id":88760,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/posts\/88730\/revisions\/88760"}],"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=88730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/categories?post=88730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/tags?post=88730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}