IC Markets Global – Asia Fundamental Forecast | 10 June 2026
What happened in the U.S. session?
The U.S. Employment Situation Report was released on Friday (June 5), which showed a surprisingly robust labor market with 172,000 nonfarm payrolls added (vs. 80,000 forecast) and unemployment steady at 4.3%, causing Treasury yields to surge and stock futures to trend negative as investors shifted from anticipating rate cuts to pricing in potential rate hikes by year-end. This “payroll panic” triggered a major technology and semiconductor selloff, with the Nasdaq Composite falling over 2.5% to one-month lows as chip stocks (Broadcom, Nvidia) lost momentum following Broadcom’s disappointing forecast.
What does it mean for the Asia Session?
China’s unexpectedly robust May trade figures, which point to strong external demand and domestic recovery while supporting the yuan, alongside escalating Iran-Israel hostilities that have pushed oil prices nearly 5% higher and raised fears of Strait of Hormuz supply disruptions. These geopolitical tensions are fueling inflation concerns that may delay Federal Reserve rate cuts beyond September, keeping pressure on growth-sensitive Asian currencies, such as the Korean won, Philippine peso, and Thai baht.
The Dollar Index (DXY)
Key news events today
Core CPI m/m (12:30 pm GMT)
Core CPI y/y (12:30 pm GMT)
CPI m/m (12:30 pm GMT)
CPI y/y (12:30 pm GMT)
What can we expect from DXY today?
The U.S. dollar is building momentum for further gains, supported by persistent inflation concerns and expectations of higher interest rates. While the dollar index dipped slightly to 99.98 on June 8, it has strengthened 2.07% over the past month and remains up 1.05% year-over-year. The greenback’s resilience has been bolstered by ongoing Middle East tensions between the U.S. and Iran, which have kept investors focused on safe-haven assets and maintained the dollar’s strength against major 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 April 28–29, 2026, meeting, as oil prices remain elevated around $108 per barrel for Brent crude amid ongoing US-Israel tensions with Iran, alongside surging inflation from energy shocks, further delaying any 2026 rate cuts potentially beyond September.
- The Committee continues to pursue maximum employment and 2% inflation goals, with the labor market showing mixed signals as nonfarm payrolls rose by 178,000 in March 2026—beating lowered expectations but driven partly by strike reversals—and the unemployment rate edged down to 4.3% from 4.4% in February.
- Officials face heightened risks from geopolitical tensions, soaring oil prices, and accelerating inflation, with CPI jumping to 3.3% year-over-year in March 2026 from 2.4% in February due to a 10.9% monthly energy surge, headline PCE pressured higher, and core PCE estimates around 3.1% or more.
- Economic activity continues to cool after robust Q4 2025 growth near 5%, with the Atlanta Fed GDPNow estimating Q1 2026 growth at 1.3% amid softer consumer spending, strike impacts, and labor data despite some resilience.
- March 2026’s Summary of Economic Projections forecasts 2026 unemployment at a median around 4.4%, GDP growth revised higher, and core PCE up to 2.7%, with the dot plot still signaling one cut in 2026 to a median 3.25%–3.50% funds rate amid softer labor but inflation upticks.
- The Committee maintains its data-dependent stance amid a mixed labor market, inflation well above target from oil shocks, and geopolitical risks, likely holding rates at 3.50%-3.75% with persistent divisions and hawkish tones on cuts.
- The FOMC continues its adjusted quantitative tightening, with Treasury rolloff caps at $5 billion per month and agency MBS at $35 billion per month to manage reserves amid post-2025 balance sheet adjustments.
- The next meeting is scheduled for 16 to 17 June 2026.
Next 24 Hours Bias
Medium Bullish
Gold (XAU)
Key news events today
Core CPI m/m (12:30 pm GMT)
Core CPI y/y (12:30 pm GMT)
CPI m/m (12:30 pm GMT)
CPI y/y (12:30 pm GMT)
What can we expect from Gold today?
Gold is trading near $4,330–$4,338 per ounce on Wednesday, June 10, 2026, caught between strong central bank buying and rising odds of a Federal Reserve rate hike following tighter-than-expected U.S. jobs data. The day is pivotal because U.S. inflation data (CPI) will be released, which could determine whether the Fed continues easing or holds rates higher for longer, a key driver for gold’s next move.
Next 24 Hours Bias
Strong Bearish
The Australian Dollar (AUD)
Key news events today
No major news event
What can we expect from AUD today?
The Australian Dollar recently hit a two-month low, dipping below 70.4 US cents as a strengthening US dollar, driven by rising global interest rates, weighed heavily on the AUD/USD pair. Although a brief US-Iran ceasefire helped the currency rebound slightly to around 70.67 cents, the AUD remains under pressure, having fallen 2.85% over the past month despite a 8.09% annual gain. The Reserve Bank of Australia is closely watching the decline, concerned that a weaker dollar could amplify domestic inflation, while earlier weak Q1 GDP data has also raised expectations of further AUD weakness.
Central Bank Notes:
- The Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to 4.35% at the 5 May 2026 meeting, moving into a more restrictive stance as inflation pressures re‑accelerated and the board judged the previous 4.10% level insufficient to re‑anchor the medium‑term outlook.
- The RBA lifted the cash rate from 4.10% to 4.35% at the 5 May meeting in an 8–1 vote, flagging that the stance is now “more restrictive” and that the Council sees a low but non‑trivial chance of further hikes if inflation risks crystallise.
- Headline CPI has jumped to 4.6% year‑on‑year for the 12 months to March 2026, up from around 3.7% in February, with trimmed‑mean inflation still above 3.0% (about 3.3–3.8% depending on the series), keeping inflation clearly outside the 2–3% target band.
- Recent monthly indicators remain sticky in services, housing‑related costs, and discretionary spending, with January and March data showing only modest easing and some upside surprises in housing‑price‑related components, underpinning the case for a stronger‑than‑expected May hike.
- Global growth has been modestly revised up but remains tempered by ongoing geopolitical tensions, commodity‑price volatility, and elevated oil prices linked to the Middle East conflict, which directly feed into Australian import‑price and transport‑cost inflation.
- Markets now price the cash rate at 4.35% in June, with futures pathways suggesting a high‑probability hold at the June meeting and only a modest chance of another 25bp hike later in 2026, contingent on further upside in CPI or services‑price data.
- The RBA continues to emphasise its “data‑dependent” approach under the dual mandate, seeking to bring inflation back toward target without materially undershooting growth or employment, while acknowledging that the Middle East‑driven shock has shifted the path of inflation and policy.
- The May communication leaned hawkishly neutral to hawkish, with the decision to hike by 25bp and a run‑of‑material referencing rising inflation expectations and the risk of second‑round effects, while still leaving room for a pause in June if upcoming monthly CPI and labour‑force data show a moderating trend.
- The next meeting is on 15 to 16 June 2026.
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 recently showed modest strength with a 0.25% daily gain on June 9, trading at 0.5824 against the US dollar, but remains in a broader bearish trend with a 2.35% monthly decline. The currency continues to face pressure from rate divergence favoring the US despite Federal Reserve cuts, with New Zealand’s rate at 2.25% (about 1.25% lower than America). As a commodity currency, NZD remains heavily influenced by New Zealand’s export sector, particularly dairy, meat, and agricultural products, and factors like steady energy prices and hopes for capital returns to dairy farmers are providing some support to the domestic economy.
Central Bank Notes:
- The Reserve Bank of New Zealand’s Monetary Policy Committee (MPC) held the Official Cash Rate (OCR) steady at 2.25% at its 27 May 2026 Monetary Policy Statement, but the decision was unprecedented—a 3-3 split requiring Governor Anna Breman’s casting vote. Three members (Hansen, Gourley, Gai) voted for an immediate 25bp hike to 2.50%, while three (Breman, Silk, Conway) voted to hold.
- While the OCR remained unchanged, the RBNZ issued its most hawkish guidance since the cutting cycle ended, stating the OCR will “likely need to rise sooner and by more than previously envisioned.” Market pricing now indicates a 72–73% probability of a rate hike at the next meeting on 8 July 2026, with swaps pricing in roughly 16bps of tightening.
- Annual CPI inflation remained at 3.1% in Q1 2026 (above the 1–3% target band) for two consecutive quarters. The RBNZ now forecasts inflation to peak at 4.3% in the September 2026 quarter—driven by Middle East oil shocks—before returning to the 2% target midpoint by mid-2027.
- The RBNZ revised its terminal OCR forecast upward to 3.28% over the next three years (from 3.0%), implying approximately 100 basis points of total tightening ahead. The updated path suggests at least two additional hikes by year-end 2026, with the OCR potentially rising to 2.50% by September 2026 and higher thereafter.
- GDP growth is projected at 0% in Q2 2026 and only 0.2% quarter-on-quarter in Q3, reflecting an early but unconvincing recovery. Unemployment, currently at 5.3% (near a decade-high), is expected to peak at 5.4% and remain there until June 2027.
- Retail sales volume rose 0.9% in Q1 2026, and electronic card data showed 2.7% annual growth in March, but high-frequency data reveals shrinking budget room as wholesale interest rates climb. Mortgage holders are increasingly shifting to two-year fixed rates for repayment certainty despite the OCR hold.
- Stronger dairy and meat export revenues (meat exports up 7% to $13.2B FY2026) and a softer NZD (TWI ~68%) support the external balance, while Middle East oil volatility poses upside inflation risks. The NZD jumped 0.7% against the USD immediately after the announcement, and two-year swap rates rose 3bps.
- Markets now expect the first hike in this tightening cycle, with the MPC’s internal division suggesting any future decision may again be contentious. Policy remains below the ~3% neutral rate, but the shift from “wait-and-see” to “preemptive tightening” is now clear.
- The next meeting is on 8 July 2026.
Next 24 Hours Bias
Weak Bearish
The Japanese Yen (JPY)
Key news events today
No major news event
What can we expect from JPY today?
The Japanese Yen continues its weakening trend against the U.S. dollar as it approaches the critical 160 per dollar intervention zone that triggered Japan’s historic FX intervention on April 30, 2026. The USD/JPY rose to 160.3540 on June 9, marking the yen’s continued depreciation of 2.02% over the past month. Finance Minister Satsuki Katayama has indicated Japan’s readiness to intervene again to prop up the yen if needed, as the benefits of the April 30 intervention (which cost approximately ¥11.7 trillion/$73.14 billion) are already waning.
Central Bank Notes:
- The Policy Board of the Bank of Japan left the short‑term policy rate unchanged at 0.75% at the 27–28 April 2026 meeting, with markets broadly expecting the same level into May 2026 as the bank continues a data‑dependent, gradual‑normalisation stance.
- The BOJ targets the uncollateralized overnight call rate around 0.75%, signaling that any further hikes toward 1.0% will hinge on wage‑inflation persistence, yen stability, and real‑activity data rather than a pre‑announced timetable.
- JGB tapering continues on plan, with outright purchases trimmed by ¥400 billion quarterly through Q1 2026, then reduced to ¥200 billion from April onward, aiming for roughly ¥2–3 trillion in monthly net purchases by mid‑2026, adjustable if market or yen volatility spikes.
- Japan’s economy posts moderate growth into Q1 2026, supported by resilient exports and prior stimulus, but the BOJ has downgraded its 2026 growth outlook as external headwinds and Middle‑East‑related shocks weigh on the pace.
- Core CPI (ex‑fresh food) is running in the mid‑1% range y/y, with headline inflation at about 1.5% y/y in March 2026, while core‑core measures remain above 2%, reflecting sticky services‑side and wage‑driven inflation.
- Input‑cost pressures ease from prior peaks, yet services inflation, the 2026 shunto wage deals near 5%, and expectations anchored above 2% support continued price pressures, with upside risks from further yen weakness and geopolitical spikes.
- Near‑term real GDP may run below trend due to policy tightening and external shocks (e.g., Iran‑related energy risks), but negative real rates, wage gains, and targeted fiscal/capex support should underpin a gradual rebound in consumption and investment.
- Medium‑term, overseas recovery, labor‑shortage‑driven wage growth, and productivity improvements are expected to keep core inflation near or above 2%, enabling the BOJ to gradually lift rates toward 1.0% in 2026–2027 if activity and wage‑inflation conditions remain aligned.
- The next meeting is on 15 to 16 June 2026.
Next 24 Hours Bias
Strong Bearish
Oil
Key news events today
EIA Crude Oil Inventories ( 2:30 pm GMT)
What can we expect from Oil today?
Oil prices declined recently, with Brent crude settling at $93.09/barrel on Friday, June 7, dropping $1.94 (2.04%) from the previous session. The broader market faces pressure from concerns about potential global supply surplus, as OPEC+ and allies, including Russia, are easing output curbs while non-OPEC producers continue adding barrels. Global oil inventories are being rapidly depleted to offset lost supplies, raising fears of operational limits that could trigger severe shortages and much higher prices in the future.
Next 24 Hours Bias
Strong Bearish
