IC Markets Asia Fundamental Forecast | 22 September 2021

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What happened in the US session?

The greenback ended flat ahead of the US FOMC meeting later today.

A default from China’s Evergrande, with more expected to come, firmed up the safe-haven assets.

What does it mean for the Asia Session?

The highly anticipated rate hike from RBNZ in the October meeting may be delayed once again should a collapse of property developer Evergrange shake the Kiwi’s two largest trading partners, China and Australia.

The Dollar Index (DXY)

Key news events today

FOMC Economic Projections, 6am GMT

FOMC Statement, 6am GMT

FOMC Press Conference, 6.30am GMT

What can we expect from DXY today?

Expectations for the FOMC meeting lean towards a hint of an official announcement of tapering in the upcoming meetings, possibly during the November or December, rather than an official announcement to taper asset purchases today.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

China’s Evergrande missed interest payments on Monday and is expected to do the same this coming Thursday. Concerns over about the potential risks to the Chinese financial system and global contagion in the event of a collapse by one of China’s largest property develop would continue to see demand for the precious metal.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

In the latest Monetary Policy Meeting Minutes, the RBA reiterated that interest rates are unlikely to rise before 2024 and the central bank would maintain its highly supportive monetary policies.

China’s Evergrande is one of the major property owners in Australia. The need for funds may drive the developer to have a ‘fire-sale’ of its properties, thereby possibly dragging the Australian property market with it.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

With major trading partners, China and Australia, under strain from the potential collapse of debt-ridden Evergrande and COVID-19, the Kiwi is likely to feel the spill over effects. In a more extreme scenario, RBNZ may hold back the highly anticipated rate increase in its upcoming meeting in October.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

Monetary Policy Statement, Tentative

BOJ Policy Rate, Tentative

BOJ Press Conference, Tentative

What can we expect from JPY today?

The Bank of Japan is expected to keep the Policy rate at -0.1% and QQE with Yield Curve Control at 0% at the upcoming central bank meeting.

On the COVID-19 front, the Japanese government is likely to lift the state of emergency by the end of the month as scheduled.

Next 24 Hours Bias

Weak Bullish