IC Markets – Asia Fundamental Forecast | 13 November 2025
What happened in the U.S. session?
The overnight US session was dominated by optimism surrounding the imminent end of the 43-day government shutdown, which drove the Dow Jones to record highs while triggering a significant rotation from technology stocks into traditional value sectors. Healthcare, financials, and consumer stocks led gains, while the technology sector suffered notable losses following SoftBank’s $5.8 billion Nvidia stake sale. The Fed’s rate cut outlook remains uncertain, with December odds declining to 63-68% as inflation persists above target at 3%. Treasury yields eased, the dollar strengthened modestly, and commodities presented mixed results with gold holding near recent highs while oil retreated.
What does it mean for the Asia Session?
Asian traders face a data-heavy session with Australian employment figures taking center stage early in the day. The potential release of delayed US CPI data adds significant event risk, while Asian markets continue benefiting from optimism over the US shutdown resolution. Key themes include diverging central bank policies (Fed easing versus BoJ tightening considerations), persistent China growth concerns despite policy support, oil market weakness from supply surplus projections, and currency volatility, particularly in JPY and AUD pairs.
The Dollar Index (DXY)
Key news events today
No major news event
What can we expect from DXY today?
Thursday, November 13, 2025, marks a pivotal day for the US dollar with three major catalysts converging: the October CPI inflation report at 8:30 AM ET (expected to show 3.0% headline and core inflation), the likely House vote to end the 43-day government shutdown, and key international economic data from Australia and the UK. The dollar is trading weakly around 99.50-99.60 on the DXY, down significantly over the past year, as markets price in a 68-70% probability of a Federal Reserve rate cut in December.
Central Bank Notes:
- The Federal Open Market Committee (FOMC) voted, by majority, to lower the federal funds rate target range by 25 basis points to 3.75%–4.00% at its October 28–29, 2025, meeting, marking the second consecutive cut following the 25 basis points reduction in September.
- The Committee maintained its long-term objectives of maximum employment and 2% inflation, noting that the labor market continues to soften, with modest job creation and an unemployment rate edging higher. In comparison, inflation remains above target at around 3.0%.
- Policymakers highlighted ongoing downside risks to economic growth, tempered by signs of resilient economic activity. September’s consumer price index (CPI) came in slightly lower than expected at 3.0% year-over-year, easing inflation pressure but still warranting vigilance given tariff-driven price effects.
- Economic activity expanded modestly in the third quarter, with GDP growth estimates around 1.0% annualized; however, uncertainty remains elevated amid persistent global trade tensions and the U.S. government shutdown, which is impacting data availability.
- The updated Summary of Economic Projections reflects an anticipated unemployment rate averaging approximately 4.5% for 2025, with headline and core personal consumption expenditures (PCE) inflation projections holding near 3.0%, indicating a slow easing path ahead.
- The Committee emphasized its flexible, data-dependent approach and underscored that future policy adjustments will be guided by incoming labor market and inflation data. As in prior meetings, there was dissent, including one member advocating a more aggressive 50-basis-point cut.
- The FOMC announced the planned conclusion of its balance sheet reduction (quantitative tightening) program, intending to cease runoff in the near term to maintain market stability, with Treasury redemption caps held steady at $5 billion per month and agency mortgage-backed securities caps at $35 billion.
- The next meeting is scheduled for 9 to 10 December 2025.
Next 24 Hours Bias
Medium Bearish
Gold (XAU)
Key news events today
No major news event
What can we expect from Gold today?
A pivotal day for gold markets, as the October CPI release will likely determine the near-term direction. Gold’s fundamental backdrop remains exceptionally supportive, with mounting expectations of Fed rate cuts (a 64–70% probability for December), unprecedented central bank purchases (634 tonnes year-to-date), and persistent geopolitical uncertainties all underpinning prices. The metal has successfully broken above $4,100 and is now testing resistance at the $4,150–$4,200 range.
Next 24 Hours Bias
Medium Bullish
The Australian Dollar (AUD)
Key news events today
Employment Change (12:30 am GMT)
Unemployment Rate (12:30 am GMT)
What can we expect from AUD today?
The Australian dollar faces a pivotal moment with employment data acting as the key catalyst. The currency is caught between competing forces: a hawkish RBA maintaining restrictive policy to combat sticky inflation, weakening Chinese demand and falling iron ore prices, and mixed signals from US monetary policy and political developments. The labour market report will be crucial in determining whether the RBA’s hawkish hold stance is justified or if softer conditions will force a policy reassessment.
Central Bank Notes:
- The Reserve Bank of Australia held its cash rate steady at 3.60% at the November policy meeting, citing persistent inflationary pressures and lingering uncertainties in both domestic and global outlooks. This is the third consecutive pause following the cut in August.
- Policymakers remain alert to renewed inflation momentum. After a temporary uptick in September’s CPI, trimmed mean inflation for Q3 stands at 3.0%, above the intended 2–3% band. The RBA now anticipates that core inflation will stay above target until at least mid-2026, delaying any hopes of further easing.
- Headline CPI climbed by 3.2% in the year to September 2025, driven by resilient housing (+2.5%) and insurance costs, while discretionary goods inflation is subdued. The transition to monthly CPI reporting from November will improve the accuracy of inflation tracking.
- Domestic demand remains firm, particularly in services and housing, while manufacturing and discretionary retail continue to lag. Household incomes have stabilized, but high borrowing costs and elevated rents are constraining consumption and risking a slowdown in Q1 2026.
- Labor market tightness persists, though job growth has moderated. Underutilization edged higher. Wage growth is plateauing, but weak productivity is keeping unit labor costs elevated—a medium-term risk that remains central to the Board’s narrative.
- The RBA highlights geopolitical tensions and volatile commodity markets as primary global risks, against a backdrop of modest upward revisions to world growth forecasts. The Board stresses that its stance remains “cautious and data-dependent,” with ongoing vigilance on inflation, labor, and spending trends.
- Monetary policy remains mildly restrictive, balancing progress on price stability against vulnerabilities in household demand and global outlook. Board communications reaffirm a dual mandate: price stability and full employment, while underscoring readiness to respond should risks materialize sharply.
- Analysts generally expect the cash rate to remain at current levels through early 2026, with only modest cuts possible later in the year if inflation moderates. The new monthly CPI release (first full edition Nov 2025) will be watched closely for timely signals on price trends.
- The next meeting is on 9 December 2025.
Next 24 Hours Bias
Weak Bullish
The Kiwi Dollar (NZD)
Key news events today
No major news event
What can we expect from NZD today?
The New Zealand Dollar faces a challenging environment heading into Thursday’s trading session on November 13, 2025. The combination of aggressive RBNZ easing, deteriorating domestic labor market conditions, weakening dairy prices, and mixed signals from China creates a predominantly bearish outlook. The currency is testing critical support levels around 0.5600, with the psychological 0.5500 floor representing the next major downside target.
Central Bank Notes:
- The Monetary Policy Committee (MPC) agreed to cut the Official Cash Rate (OCR) by 50 basis points to 2.50% on 8 October 2025, exceeding market expectations for a smaller 25-basis-point reduction and signaling a stronger commitment to reviving growth.
- The decision was reached by consensus, marking a shift from previous split votes, and reflected policymakers’ shared view that sustained economic weakness and persistent disinflationary pressures required a more front-loaded policy response.
- Annual consumer price inflation stood at 2.7% in the June quarter and is seen nearing 3% for the September quarter—above the 2% midpoint but within the 1–3% target range. Despite high near-term readings, the MPC projects inflation will return toward 2% by the first half of 2026 as spare capacity and moderating tradables curb price momentum.
- Policymakers acknowledged that domestic demand remains weak, with household spending, business investment, and construction activity under pressure. While still elevated, services inflation is expected to ease gradually as wage growth slows and unemployment edges higher.
- Financial conditions have eased with expectations as wholesale and retail borrowing rates adjust to lower policy settings. Bank lending data indicate a modest uptick in mortgage approvals, though broader credit demand remains subdued.
- GDP growth stalled in the middle of 2025, with high-frequency indicators showing continued weakness into the third quarter. A combination of elevated costs for essentials and falling savings continues to restrain household consumption, while global trade frictions weigh on business sentiment.
- The MPC noted that global uncertainty—particularly from US trade regulation changes and soft Chinese demand—continues to pose downside risks to export sectors, though these are partly offset by a weaker New Zealand dollar improving competitiveness.
- Subject to data confirming a sustained soft patch in activity and moderating inflation pressures, the MPC signaled further scope to reduce the OCR toward 2.25% at its next meeting on 26 November 2025, consistent with current market and Westpac forecasts.
- The next meeting is on 26 November 2025.
Next 24 Hours Bias
Medium Bearish
The Japanese Yen (JPY)
Key news events today
No major news events
What can we expect from JPY today?
The Japanese yen faces multiple headwinds, including Prime Minister Takaichi’s dovish rhetoric emphasizing close BoJ coordination, the impending large-scale stimulus package urging accommodative monetary policy, and improving global risk sentiment following progress on the US government shutdown. While BoJ’s internal debate suggests conditions for rate hikes are nearly met, political pressure and economic uncertainties are likely to delay any policy tightening. Intervention warnings from Japanese authorities have intensified but lack credibility until USD/JPY approaches 160.00.
Central Bank Notes:
- The Policy Board of the Bank of Japan met on 30–31 October and, by a clear majority vote, decided to maintain its key monetary policy approach for the upcoming period.
- The BOJ will continue to encourage the uncollateralized overnight call rate to remain at around 0.5%, in line with the prior stance.
- The gradual quarterly reduction in monthly outright purchases of Japanese Government Bonds (JGBs) remains intact, with amounts unchanged from the previous schedule. Purchases are set to decrease by about ¥400 billion per quarter through March 2026, shifting to about ¥200 billion per quarter from April to June 2026, and targeting a ¥2 trillion purchase level for Q1 2027. The bank reaffirmed its intention to maintain flexibility, with readiness to respond if market conditions warrant an adjustment.
- Japan’s economy continues to show moderate recovery, primarily led by solid capital expenditures, although export growth and corporate activity remain restrained by external demand uncertainty and the ongoing effects of U.S. trade policies.
- Annual headline inflation (excluding fresh food) accelerated to 2.9% year-on-year in September, marking the first uptick in four months and staying above the BOJ’s 2% target. Broad-based inflation persists, with food and energy cost pressures, but wage growth continues to support household consumption. Input cost pressures from the earlier surge in imports eased slightly.
- Short-term inflation momentum could moderate as food-price hikes ease, though rent, healthcare, and service-sector price increases tied to labor shortages provide support. Firms and households maintain a gradual upward drift in inflation expectations.
- For the near term, BOJ projects growth below trend as external demand stays subdued and corporate investment plans remain cautious. Still, accommodative financial conditions and steady gains in real labor income will underpin domestic consumption.
- Over the medium term, as overseas economies recover and trade conditions normalize, Japan’s growth potential should improve. Persistent labor market tightness, higher wage settlements, and rising medium- to long-term inflation expectations are expected to keep core inflation on a gradual upward trajectory, converging toward the 2% price stability target later in the forecast horizon.
- The next meeting is scheduled for 18 to 19 December 2025.
Next 24 Hours Bias
Medium Bullish
Oil
Key news events today
No major news event
What can we expect from Oil today?
Oil markets are grappling with multiple crosscurrents. Key bearish factors include OPEC’s acknowledgment of Q3 market surplus, expectations of substantial inventory builds through 2026, persistent oversupply from both OPEC+ production increases and non-OPEC growth, and sluggish demand, particularly from China. Supportive elements include US sanctions disrupting Russian oil exports and forcing supply chain adjustments.
Next 24 Hours Bias
Weak Bearish
