{"id":88949,"date":"2026-08-12T17:20:04","date_gmt":"2026-08-12T07:20:04","guid":{"rendered":"https:\/\/ic.com\/blog\/?p=88949"},"modified":"2026-08-12T17:20:05","modified_gmt":"2026-08-12T07:20:05","slug":"ic-asia-fundamental-forecast-12-august-2026","status":"publish","type":"post","link":"https:\/\/ic.com\/blog\/ic-asia-fundamental-forecast-12-august-2026\/","title":{"rendered":"IC &#8211; Asia Fundamental Forecast | 12 August 2026"},"content":{"rendered":"\n<p><strong>IC &#8211; Asia Fundamental Forecast | 12 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 overnight U.S. session was dominated less by fresh economic data and more by positioning ahead of U.S. CPI, elevated Treasury yields, and geopolitical risks surrounding oil and the Strait of Hormuz. Oil remained supported by supply concerns, while the USD retained a degree of strength as traders awaited inflation data that could influence the Fed&#8217;s rate outlook. Gold faced pressure from elevated yields and a relatively firm dollar, while U.S. equities remained near highs but vulnerable to a CPI surprise. For Asian traders, the RBA&#8217;s 4.35% hold and its still-hawkish inflation stance became the key additional catalyst, making AUD\/USD, AUD\/JPY, gold, oil, USD pairs and U.S. indices the instruments most likely to experience increased volatility.<br \/><br \/><strong>What does it mean for the Asia Session?<\/strong><br \/><br \/>Traders are digesting the RBA&#8217;s decision to keep rates at 4.35%, making the AUD particularly sensitive to the tone of the Bank&#8217;s forward guidance. Attention will then shift toward Japan and broader Chinese\/Asian economic developments, while the biggest market-moving event of the day is expected to be the U.S. July CPI report, which could significantly influence expectations for the Federal Reserve&#8217;s next policy moves and trigger sharp moves in the USD, gold, equities and risk-sensitive currencies. Oil traders should also monitor the EIA inventory figures and ongoing geopolitical developments.<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 CPI m\/m (12:30 pm GMT)<br \/><br \/>Core CPI y\/y (12:30 pm GMT)<br \/><br \/>CPI m\/m (12:30 pm GMT)<br \/><br \/>CPI y\/y (12:30 pm GMT)<br \/><br \/><strong>What can we expect from DXY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The U.S. dollar remains sensitive to shifting Federal Reserve rate expectations, with traders focused on the upcoming July CPI report for clues about the Fed\u2019s next policy move. A hotter-than-expected inflation reading could support the USD by lifting rate expectations and Treasury yields, while softer inflation could weaken the dollar and increase expectations for easier policy. Overall, the USD outlook is moderately bullish, but significant volatility is expected around the CPI release.<\/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>Weak Bearish<\/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 CPI m\/m (12:30 pm GMT)<br \/><br \/>Core CPI y\/y (12:30 pm GMT)<br \/><br \/>CPI m\/m (12:30 pm GMT)<br \/><br \/>CPI y\/y (12:30 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> enters Wednesday with a bullish bias, supported by weakening U.S. employment data, fading expectations of aggressive Fed tightening and strong recent price momentum. The metal has pushed back toward $4,400 after reaching a two-month high, but the next major move will likely depend on the U.S. July CPI report. Softer-than-expected inflation would likely weaken the dollar and Treasury yields and provide another boost to gold, while hotter inflation could strengthen the dollar and trigger profit-taking. Traders should therefore expect elevated volatility around the CPI release and watch whether gold can hold above the $4,400 area and continue toward $4,450\u2013$4,500.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><br \/>Medium Bullish<\/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 has a mildly bullish bias after the Reserve Bank of Australia (RBA) kept the Cash Rate unchanged at 4.35% at its 11 August meeting, as expected. More importantly for the AUD, the RBA maintained a hawkish stance, with Governor Michele Bullock indicating that another rate increase later this year remains possible if inflationary pressures prove persistent. The central bank continues to view inflation as too high, while stronger consumer spending and employment are providing some resilience to domestic demand.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul>\n<li>The Reserve Bank of Australia (RBA) is expected to maintain a cautious, data-dependent policy stance heading into its September 2026 Monetary Policy Meeting. The Cash Rate Target remains at 4.35%, following three increases earlier in 2026. The RBA has indicated that monetary policy needs to remain sufficiently restrictive to bring inflation back toward the 2\u20133% target while allowing the Board to assess the effects of previous tightening on household demand, employment and economic activity.<\/li>\n\n\n\n<li>Inflation remains the central issue for the September meeting, although headline price pressures have continued to moderate. Australia&#8217;s CPI rose 3.8% year-on-year in June 2026, down from 4.0% in May, while trimmed-mean inflation remained at 3.6%. This suggests that underlying inflation is proving more persistent than headline inflation and remains above the RBA&#8217;s 2\u20133% target band. Housing costs continue to be an important source of inflationary pressure, while the end of some electricity rebates has also contributed significantly to household costs.<\/li>\n\n\n\n<li>The August and September inflation data will be particularly important for determining the RBA&#8217;s next move. The ABS is scheduled to release July 2026 CPI on 26 August, giving policymakers a fresh inflation reading before the September meeting. The data will help determine whether the recent moderation in headline inflation is becoming more broad-based or whether services and domestic cost pressures remain stubborn.<\/li>\n\n\n\n<li>The labour market remains relatively resilient, but there are early signs of moderation. Australia&#8217;s unemployment rate was 4.4% in June, while employment increased by approximately 76,300 people and the participation rate rose to 67.0%. The increase in employment provides the RBA with room to keep policy restrictive, although rising unemployment or a significant decline in employment growth could strengthen the case for eventually easing monetary policy.<\/li>\n\n\n\n<li>Wage growth will remain an important indicator for the September decision. The latest available Wage Price Index showed wages increasing 0.8% quarter-on-quarter and 3.3% year-on-year in the March quarter. The June-quarter wage data is scheduled for release on 19 August 2026, meaning the RBA will have this information available before its September meeting. A stronger-than-expected wage result could reinforce concerns about persistent domestic inflation, while softer wage growth would support the argument that inflation is gradually returning toward target.<\/li>\n\n\n\n<li>Household demand and economic growth will remain closely monitored. Higher borrowing costs continue to place pressure on mortgage holders and discretionary household spending. At the same time, improving real incomes and easing headline inflation could gradually support consumption later in the year. The RBA will therefore need to balance the risk of keeping rates restrictive for too long against the risk of easing policy before underlying inflation has been sufficiently contained.<\/li>\n\n\n\n<li>Global economic and commodity-market conditions remain an important risk for Australia. Developments in energy prices, geopolitical tensions and China&#8217;s economic performance could have significant implications for Australia&#8217;s inflation and export outlook. A renewed increase in energy prices could raise Australia&#8217;s inflation outlook, while weaker Chinese demand could weigh on commodity exports, business activity and overall economic growth..<\/li>\n\n\n\n<li>Financial markets are likely to remain highly sensitive to incoming inflation and employment data. With the cash rate already at 4.35%, markets will closely assess whether the RBA is approaching the end of its tightening cycle or whether another increase could become necessary. A sustained decline in underlying inflation and weaker domestic demand would strengthen expectations for eventual rate cuts, while persistent services inflation, strong wages or renewed energy-price pressures could keep the possibility of another hike alive.<br \/><br \/><\/li>\n\n\n\n<li>The next meeting is on 28 to 29 September 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 remains under pressure, with recent weakness largely linked to softer domestic labour-market conditions and reduced expectations for aggressive Reserve Bank of New Zealand (RBNZ) tightening. The RBNZ raised the Official Cash Rate by 25 basis points to 2.50% on 8 July, while warning that the timing of further increases would depend on inflation pressures and excess capacity in the economy. Recent labour-market data have also weighed on the Kiwi, with NZD\/USD falling below 0.5900 as unemployment reached its highest level since 2015, increasing concerns about the strength of the domestic recovery.<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>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 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 yen has a bearish-to-neutral bias, as<a href=\"https:\/\/www.tradingview.com\/symbols\/USDJPY\/?exchange=ICMARKETS\" title=\"\"> USD\/JPY<\/a> trades close to 159 and the impact of the recent intervention continues to fade. The key risk is the U.S. CPI release, which could generate significant volatility in USD\/JPY. Traders should also be cautious around the 160 area, where renewed Japanese intervention concerns could increase sharply if yen weakness accelerates.<\/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>Medium 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 is entering Wednesday\u2019s session with geopolitical risk and supply disruptions remaining the dominant drivers. On Tuesday, Brent crude was around $87.84 per barrel, while WTI traded near $82.20, with prices holding close to one-week highs as markets assessed developments surrounding the Strait of Hormuz. Talks involving Oman and Iran aimed at improving shipping through the Strait remain a major focus, but progress is still uncertain. The disruption is particularly important because the Strait previously carried roughly 20% of global oil flows.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Medium Bullish<\/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 | 12 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\/88949"}],"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=88949"}],"version-history":[{"count":2,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/posts\/88949\/revisions"}],"predecessor-version":[{"id":88980,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/posts\/88949\/revisions\/88980"}],"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=88949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/categories?post=88949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ic.com\/blog\/wp-json\/wp\/v2\/tags?post=88949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}