IC Markets Global – Asia Fundamental Forecast | 11 June 2026
What happened in the U.S. session?
The overnight U.S. session driver was the May U.S. CPI report, which showed headline inflation at 4.2% year over year, with monthly CPI at 0.5% and core inflation at 2.9% year over year. Markets also stayed focused on renewed U.S.-Iran tensions, which kept oil prices bid and added to the risk-off tone in equities.
What does it mean for the Asia Session?
Asian traders face a high-stakes day dominated by the European Central Bank’s anticipated 25bps rate hike amid Eurozone inflation accelerating to 3.2%, US PPI inflation data providing the final preview before the Federal Reserve’s monthly decision, and SpaceX pricing its record $75 billion IPO at a $1.75 trillion valuation the night before its Nasdaq debut. Geopolitical tensions remain critical as US-Iran clashes near the Strait of Hormuz keep Brent crude elevated around $91-93/barrel, driving foreign outflows from Asian equities alongside an AI tech rout following Broadcom’s underwhelming results.
The Dollar Index (DXY)
Key news events today
Core PPI m/m (12:30 pm GMT)
PPI m/m (12:30 pm GMT)
Unemployment Claims (12:30 pm GMT)
What can we expect from DXY today?
The US dollar has been trending weaker in early June 2026, with broad-based losses against major currencies, including the euro (EUR/USD at 1.15), pound (GBP/USD at 1.33), and yen (DXY near 99). The dollar’s weakness stems from concerns about sticky US inflation (CPI at 3.8%) and geopolitical uncertainty, particularly around the unsigned US-Iran ceasefire, which has kept the Dollar Index firmer than some expected but still under pressure.
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 PPI m/m (12:30 pm GMT)
PPI m/m (12:30 pm GMT)
Unemployment Claims (12:30 pm GMT)
What can we expect from Gold today?
Gold prices are under pressure today, after a sharp selloff earlier this week driven by stronger-than-expected U.S. economic data and renewed expectations that the U.S. Federal Reserve may keep interest rates higher for longer. Higher Treasury yields and a firmer U.S. dollar have reduced demand for non-yielding assets like gold, pushing XAU/USD lower toward recent support levels after falling to multi-month lows earlier in the week. Markets are now closely watching upcoming U.S. inflation data and any signals from the Fed for clues on future monetary policy, which could determine gold’s next direction.
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 Australian dollar (AUD) is trading with a mixed-to-slightly bearish tone today, Thursday, 11 June 2026, as traders balance weaker U.S. dollar momentum against concerns over global growth and Australian rate expectations. The Aussie recently came under pressure after falling to a two-month low earlier this week, mainly due to stronger U.S. rate expectations and global risk aversion. However, softer U.S. dollar demand following U.S. inflation data has provided some short-term relief for AUD pairs.
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 (NZD), also known as the “Kiwi,” is trading with a cautiously bullish tone today, Thursday, 11 June 2026, supported mainly by improving global risk sentiment and stable Chinese trade data, which is important because China remains New Zealand’s largest export partner. Markets are also still digesting the recent hawkish stance from the Reserve Bank of New Zealand (RBNZ), which kept interest rates steady but signaled less urgency for future easing, giving the NZD some medium-term support.
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
Medium Bearish
The Japanese Yen (JPY)
Key news events today
No major news event
What can we expect from JPY today?
The Japanese Yen (JPY) remains under pressure today, Thursday, as traders focus heavily on next week’s expected Bank of Japan policy meeting and growing speculation of a rate hike. Markets are increasingly pricing in a possible increase in the BOJ’s benchmark rate from 0.75% to 1.0% on June 16, driven by persistent inflation and rising energy costs, which could support the Yen in the medium term.
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
No major news event
What can we expect from Oil today?
Oil prices remain highly volatile today, Thursday, as traders continue reacting to escalating geopolitical tensions in the Middle East and ongoing supply disruptions. The biggest driver remains uncertainty surrounding Iran and the Strait of Hormuz, a key global oil shipping route, with reports of disrupted vessel traffic keeping supply concerns elevated. At the same time, a sharp decline in U.S. crude inventories has added bullish pressure, signaling tighter near-term supply.
Next 24 Hours Bias
Weak Bearish
