IC Markets Global – Asia Fundamental Forecast | 12 February 2026
What happened in the U.S. session?
The standout event in the U.S. session overnight was the robust January jobs report exceeding forecasts with 130k payroll gains and a dip to 4.3% unemployment, fueling higher Treasury yields and a fleeting dollar boost while equities diverged, underscoring persistent Fed caution on cuts amid resilient but revised-lower labor trends; this primarily rippled through USD pairs, bond markets, and major indices like Dow/S&P, with limited immediate commodity shifts noted.
What does it mean for the Asia Session?
Asian traders should monitor key data releases, including UK GDP, Industrial Production, and Trade Balance at 2:00 PM GMT (which is early morning Asia time, around 10:00 PM GMT+8 on Feb 11 to 3:00 AM GMT+8 on Feb 12). US data like PPI and Existing Home Sales follow later in the US session, potentially driving USD strength amid ongoing inflation watch, while Asian-specific flows may react to recent China guidance on reducing US Treasury exposure and tech stock dynamics.
The Dollar Index (DXY)
Key news events today
Unemployment Claims (1:30 pm GMT)
What can we expect from DXY today?
The US dollar is trading on a weaker footing today, pressured by soft US data and a dovish‑leaning Federal Reserve stance that keeps markets pricing in multiple rate cuts this year. The DXY index has climbed slightly from recent multi‑week lows but remains well off last year’s highs, reflecting broad‑based USD softness against the euro, yen, sterling, and several emerging‑market currencies.
Central Bank Notes:
- The Federal Open Market Committee (FOMC) is widely expected to hold the federal funds rate target range steady at 3.50%–3.75% at its January 27–28, 2026, meeting, marking the second consecutive pause after three 25-basis-point cuts in late 2025.
- The Committee continues to pursue maximum employment and 2% inflation goals, with the labor market remaining soft as the unemployment rate stood at 4.4% in December 2025 amid modest job gains of 50,000.
- Officials note balanced risks to growth and employment alongside sticky inflation, with CPI at 2.7% year-over-year in December 2025 and core PCE at 2.8% due to tariffs and housing pressures; headline PCE at 2.6%.
- Economic activity expanded robustly at 4.4% annualized in Q3 2025, with Q4 estimates around 5% per Atlanta Fed GDPNow, supported by consumer spending despite prior trade tensions and shutdown effects.
- December 2025’s Summary of Economic Projections forecasts 2025 unemployment at a median of 4.5%, 2026 GDP growth at 2.3%, and core PCE at 2.5% (down from prior 2.6%), with the dot plot signaling one more cut in 2026; January updates may reflect resilient Q4 growth.
- The Committee maintained its data-dependent approach, noting a stable but soft labor market and inflation above target, while holding rates steady at 3.50%-3.75%; dissents likely persist amid divisions on the pace of easing.
- The FOMC continues its adjusted quantitative tightening post-December 1, 2025, conclusion of prior program, with Treasury rolloff caps at $5 billion per month and agency MBS at $35 billion per month to maintain ample reserves.
- The next meeting is scheduled for 17 to 18 March, 2026.
Next 24 Hours Bias
Medium Bearish
Gold (XAU)
Key news events today
Unemployment Claims (1:30 pm GMT)
What can we expect from Gold today?
Gold is holding near recent multi‑week highs around USD 5,050–5,060/oz after a strong consolidation bounce off the mid‑January low, underpinned by softer US data that has revived hopes of more‑accommodative Federal Reserve policy. Despite some profit‑taking and modest dollar strength pushing the metal back within a narrow trading band, gold remains in a structurally bullish regime versus last year, with traders now focused on key US economic releases that could either confirm a shift toward lower real yields or trigger another burst of volatility in the yellow metal.
Next 24 Hours Bias
Weak Bearish
The Australian Dollar (AUD)
Key news events today
No major news event
What can we expect from AUD today?
The AUD has rallied significantly into early 2026 on hawkish RBA rhetoric, robust commodity prices, and easing US Fed interference fears, though Chinese deflation risks loom as a headwind; forecasts eye 0.70 end-quarter and 0.72 in 12 months. Traders await potential February RBA action, with consumer sentiment dips adding caution.
Central Bank Notes:
- The Reserve Bank of Australia (RBA) is widely expected to raise its cash rate by 25 basis points to 3.85% at the February 2-3, 2026 policy meeting, responding to persistently high inflation data from the December quarter. This would reverse the cautious pauses since the August 2025 cut, as two consecutive quarters of elevated inflation readings—following the September surprise—prompted upward revisions to forecasts. Policymakers have prepared markets for this move, viewing it as necessary despite temporary factors in prior data.
- Inflation vigilance remains paramount, with trimmed mean measures in the low 3s and unlikely to hit the 2–3% target midpoint before late 2026. Underlying pressures persist from services, housing, and capacity constraints, amplified by the shift to monthly CPI reporting since November 2025, which flagged broader pick-up risks. Forecasts now delay easing further amid sticky wage growth and softening but resilient labor market dynamics.
- Headline CPI exceeded expectations again in December, driven by core stickiness beyond one-off items like energy, while new monthly data enhances monitoring precision. Services and housing continue fueling resilience, with domestic demand firm despite below-trend goods growth.
- Labor market softening sees unemployment stabilizing near 4.4%, but unit labor costs linger as a concern amid subdued productivity. Household spending grapples with elevated borrowing costs, though private demand recovery adds to capacity pressures not easing soon.
- Global outlook features modestly higher growth projections offset by geopolitical risks and commodity swings; policy shifts to unambiguously restrictive post-hike. Data-dependence anchors decisions, balancing inflation control against employment amid household vulnerabilities.
- Post-hike, monetary policy enters restrictive territory to combat price stability risks, reaffirming the dual mandate of 2–3% inflation and full employment with data-responsive flexibility.
- Markets price in the February hike to 3.85%, with big four banks aligning (CBA, Westpac) and some like NAB eyeing further rises to 4.10% by mid-year if inflation persists. Monthly CPI will provide critical real-time signals for subsequent moves.
- Policy tightens to counter inflation persistence against household and global fragilities, upholding dual mandate commitments and adaptability to evolving risks.
- Consensus tilts toward the February hike, with limited further increases as base case unless inflation accelerates; monthly data remains pivotal for 2026 trajectory.
- The next meeting is on 16 to 17 March 2026.
Next 24 Hours Bias
Weak Bearish
The Kiwi Dollar (NZD)
Key news events today
No major news event
What can we expect from NZD today?
Investors are assessing the RBNZ’s outlook ahead of upcoming economic projections, with no major data releases pinpointed for February 12, but focus lingering on labor trends and inflation dynamics. A broader USD pullback, tied to US tariff talks and Fed rate cut expectations, aided the kiwi’s advance, though it remains sensitive to domestic pricing pressures expected to ease in 2026.
Central Bank Notes:
- The Monetary Policy Committee (MPC) left the Official Cash Rate (OCR) unchanged at 2.25% at its 26 November 2025 meeting, following the widely anticipated 25-basis-point reduction from 2.50%, and signaled that policy is now firmly in stimulatory territory while keeping the option of further easing on the table if needed.
- The decision was again reached by consensus, with members judging that the cumulative 325 basis points of easing over the past year warranted a period of assessment, even as several emphasized a willingness to cut further should incoming data point to a more protracted downturn or renewed disinflationary pressures.
- Headline consumer price inflation is projected to hover near 3% in late 2025 before gradually easing toward the 2% midpoint of the 1–3% target band through 2026, supported by contained inflation expectations around 2.3% over the two-year horizon and an expected pickup in spare capacity.
- The MPC noted that domestic demand remains subdued but shows tentative signs of stabilisation, with softer household spending and construction only partially offset by improving services activity; nevertheless, policymakers still expect services inflation to ease as wage growth moderates and the labour market loosens further over the coming year.
- Financial conditions continue to ease as wholesale and retail borrowing rates reprice to the lower OCR, contributing to gradually rising mortgage approvals and improving housing-related sentiment, although broader business credit growth remains patchy and sensitive to uncertainty about the durability of the recovery.
- Recent data confirm that GDP momentum is weak but not deteriorating as sharply as earlier in 2025, with high-frequency indicators pointing to a shallow recovery from a low base and ongoing headwinds from elevated living costs and fragile confidence weighing on discretionary consumption and investment.
- The MPC reiterated that external risks remain skewed to the downside, particularly from softer Chinese demand and uncertainty around United States trade policy, but noted that a lower New Zealand dollar continues to provide some offset via improved export competitiveness and support for tradables inflation.
- Looking ahead to early 2026, the Committee maintained a mild easing bias, indicating that a further cut toward 2.00–2.10% cannot be ruled out if activity fails to gain traction or if inflation undershoots projections, but current forecasts envisage the OCR remaining near 2.25% for an extended period, provided inflation converges toward target and the recovery proceeds broadly as expected.
- The next meeting is on 18 February 2026.
Next 24 Hours Bias
Medium Bullish
The Japanese Yen (JPY)
Key news events today
No major news event
What can we expect from JPY today?
Recent political clarity and intervention fears have propelled the Japanese Yen to multi-session highs against the USD, with USD/JPY dipping below 155 as of February 10-11, 2026, amid subdued Asian trading and anticipation of US economic releases; however, fiscal expansion concerns and soft wage growth temper further upside, with markets watching for BoJ cues and potential FX defense near 160.
Central Bank Notes:
- The Policy Board of the Bank of Japan meets on 22–23 January 2026, with markets fully expecting the short-term policy rate to remain at 0.75%, following the December 2025 hike, as the bank assesses the impact of prior tightening while emphasizing gradual, data-dependent adjustments.
- The BOJ will continue targeting the uncollateralized overnight call rate around 0.75% and signal that future rate hikes depend on the effects of recent increases on bank lending, corporate financing, and economic activity, with some policymakers eyeing a possible move as early as April.
- JGB purchase tapering proceeds on schedule, with outright purchases reduced by ¥400 billion per quarter through March 2026, then ¥200 billion per quarter from April to June 2026, aiming for around ¥2 trillion monthly in Q1 2027, with flexibility if market conditions worsen.
- Japan’s economy showed recovery signs after the Q3 2025 contraction, with Q4 2025 GDP growth estimated positively amid export strength, though business sentiment among manufacturers softened to a six-month low of +7 in January 2026 due to weaker overseas demand.
- Core consumer inflation (excluding fresh food) eased to 2.3% year-on-year in December 2025 Tokyo CPI, down from 2.8-3.0% peaks earlier, while core-core (excluding fresh food and energy) stood at 2.6%, both above the 2% target but with moderating cost pressures.
- Near-term input costs continue easing from faded import surges, but services inflation and steady wage gains with early 2026 negotiations targeting 5% hikes sustain price momentum; medium-term inflation expectations remain anchored above 2%, tilting upside risks.
- In the coming quarters, real growth may moderate below potential amid tighter conditions and yen weakness, but accommodative real rates, real wage gains, and fiscal support are poised to bolster private consumption and investment recovery.
- Medium-term, stabilizing overseas demand and tight labor markets should drive wage growth and keep core inflation gradually around or above 2%, allowing cautious rate normalization if financial conditions stay supportive.
- The next meeting is scheduled for April 2026.
Next 24 Hours Bias
Medium Bullish
Oil
Key news events today
No major news event
What can we expect from Oil today?
Oil markets on February 11, 2026, saw WTI climb to $65.70 and Brent exceed $70 per barrel, driven primarily by persistent US-Iran frictions, including naval warnings in the Strait of Hormuz and talk of tanker seizures or military escalation that fueled a risk premium outweighing inventory build fears and milder US weather outlooks.
Next 24 Hours Bias
Medium Bullish
