IC Markets Global – Asia Fundamental Forecast | 29 April 2026
What happened in the U.S. session?
The U.S. financial landscape has been shaped by a focus on corporate earnings momentum, ongoing geopolitical tensions in the Middle East, and speculation surrounding upcoming Federal Reserve leadership changes. Markets have responded to these developments with cautious optimism, as evidenced by slight gains in the S&P 500 and Nasdaq 100, though oil markets remain sensitive to the U.S.-Iran impasse. Concurrently, U.S. Treasury yields have drifted higher as investors process the extension of a ceasefire in that region.
What does it mean for the Asia Session?
Asian traders should brace for oil‑driven volatility, with elevated crude and gold prices amplifying stress on net‑oil‑importing economies such as India, Indonesia, and the Philippines, while AI‑ and chip‑led strength continues to underpin North Asian indices. Key short‑term drivers include the Bank of Japan’s cautious stance, upcoming Australian CPI and Chinese PMI releases, and spillovers from US‑Iran geopolitical noise and Fed‑related dollar dynamics, all of which will influence FX, equities, and commodity flows during the Asian session.
The Dollar Index (DXY)
Key news events today
Federal Funds Rate (6:00 pm GMT)
FOMC Statement (6:00 pm GMT)
FOMC Press Conference (6:30 pm GMT)
What can we expect from DXY today?
The US dollar is holding in a defensive range around the high‑98s on the DXY, with the dominant focus on the FOMC decision and the messaging around future rate cuts rather than the policy rate itself; elevated US yields, sticky inflation, and renewed Middle‑East‑driven oil risk continue to underpin the greenback, while short‑term swings are being driven by risk sentiment and Fed‑speak around the timing and number of 2026 cuts.
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 March 17–18, 2026, meeting, amid rising oil prices from the US-Israel war against Iran and persistent inflation pressures, delaying any 2026 cuts potentially to September.
- The Committee continues to pursue maximum employment and 2% inflation goals, with the labor market weakening further as nonfarm payrolls declined by 92,000 in February 2026 and the unemployment rate rose to 4.4% from 4.3% in January.
- Officials face tilted risks from geopolitical tensions, elevated oil prices, and sticky inflation, with CPI steady at 2.4% year-over-year in February 2026, headline PCE at 2.8% in January, and core PCE rising to 3.1%.
- Economic activity has cooled after robust Q4 2025 growth near 5%, with the Atlanta Fed GDPNow now estimating Q1 2026 growth at around 2.1%–2.7% amid softer consumer spending and labor data.
- 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%, with the dot plot signaling one more cut in 2026 to a median 3.4% funds rate; March updates may reflect softer labor and inflation upticks.
- The Committee maintains its data-dependent stance amid a softening labor market, inflation above target, and new oil shocks, likely holding rates at 3.50%-3.75% with ongoing divisions and possible hawkish dissents on rate 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 ensure ample reserves post-2025 program adjustments.
- The next meeting is scheduled for 28 to 29 April 2026.
Next 24 Hours Bias
Weak Bearish
Gold (XAU)
Key news events today
Federal Funds Rate (6:00 pm GMT)
FOMC Statement (6:00 pm GMT)
FOMC Press Conference (6:30 pm GMT)
What can we expect from Gold today?
gold maintains resilience near $4,688 amid a mix of de-escalating Middle East tensions, a firm dollar, and safe-haven demand, with traders watching for US-Iran compliance and potential Fed policy shifts; expect modest upside if peace holds, but volatility persists below the $4,930 resistance.
Next 24 Hours Bias
Medium Bullish
The Australian Dollar (AUD)
Key news events today
CPI m/m (1:30 am GMT)
CPI y/y (1:30 am GMT)
Trimmed Mean CPI m/m (1:30 am GMT)
What can we expect from AUD today?
The Australian Dollar continues its strong run, trading near recent four-year highs around 0.7188-0.72 USD amid optimism for RBA rate hikes, robust local labor data, and fading US-Iran tensions that curb USD strength and oil-driven inflation fears; year-to-date gains exceed 11%, positioning AUD as a G10 standout, though ASX softness and lingering geopolitics cap upside.
Central Bank Notes:
- The Reserve Bank of Australia (RBA) is expected to hold its cash rate at 3.85% at the March 16-17, 2026 policy meeting, following the widely anticipated 25 basis point hike to 3.85% in early February after persistent inflation pressures from late 2025. While some banks like CBA, NAB, and Westpac now forecast a further 25-basis-point rise to 4.10% as soon as May if inflation data remains sticky, consensus tilts toward a pause in March to assess incoming monthly CPI and labor market signals. The February hike reversed prior cuts, entering mildly restrictive territory amid capacity pressures, with the board emphasizing data dependence.
- Inflation remains elevated, with December 2025 CPI at 3.8% year-on-year and trimmed mean at 3.3%, above the 2–3% target midpoint. RBA’s February Statement revised forecasts higher, projecting trimmed-mean inflation to peak in mid-2026 above 3% and remain elevated through early 2027, driven by services, housing, and demand resilience despite some monthly cooling, such as January’s 0.2% MoM gauge. Monthly CPI data continues to highlight core stickiness beyond energy rebates, delaying the target return to late 2027 or beyond.
- January 2026 monthly indicators showed modest easing, but headline CPI risks upward surprises from housing (up recently) and services amid firm domestic demand. Trimmed mean pressures persist from wage growth and capacity constraints, with consumer expectations ticking to 5% YoY in February surveys. Enhanced monthly reporting sharpens vigilance on potential broad-based pick-up.
- The labor market shows softening, with unemployment around 4.1-4.4%, down slightly to 4.1% in December, but unit labor costs are elevated due to subdued productivity. Household spending faces higher borrowing costs post-hike, yet private demand recovery sustains capacity strains. Vulnerabilities persist amid resilient employment dynamics.
- Global growth modestly revised up but tempered by geopolitics and commodity volatility; policy now restrictive post-February, with the RBA balancing inflation against employment risks. Data from the monthly CPI and Q1 GDP will guide, amid household debt sensitivities.
- Sustained restrictive stance post-February anchors inflation return to target, upholding dual mandate with flexibility to new risks like further inflation upticks.
- Markets price a March hold at 3.85%, with big four banks split: CBA, NAB, Westpac eye May hike to 4.10% if persistence continues, while others see limited upside unless acceleration. Upcoming monthly CPI pivotal for Q2 trajectory.
- Policy vigilance counters inflation stickiness against household fragilities and global uncertainties, reaffirming adaptability under dual mandate.
- Base case favors March hold with risks tilted hawkish for further hikes if data is hot; monthly indicators key to 2026 path.
- The next meeting is on 5 to 6 May 2026.
Next 24 Hours Bias
Medium Bullish
The Kiwi Dollar (NZD)
Key news events today
RBNZ Gov Breman Speaks (12:30 am GMT)
What can we expect from NZD today?
The New Zealand Dollar (NZD) showed limited movement following a slight depreciation the previous day. Recent reports indicate NZD/USD traded steadily around 0.5890 after slipping below that level on April 28, amid broader market caution influenced by US Dollar strength and ongoing global trade tensions.
Central Bank Notes:
- The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) is widely expected to hold the Official Cash Rate (OCR) steady at 2.25% at its 8 April 2026 Monetary Policy Review, aligning with unanimous market consensus from Reuters polls and previews.
- The MPC continues its data-dependent “wait-and-see” approach after February’s pause, balancing stimulus from prior 325-basis-point cuts against inflation’s path back to the 2% target, with readiness for gradual normalization only if the recovery strengthens or inflation exceeds forecasts.
- Headline CPI, last at 3.1%, is on track to re-enter the 1-3% band in Q2 2026 and hit 2% by mid-2027, aided by spare capacity, moderating wages, and softer food/fuel prices; two-year business inflation expectations have ticked up slightly to 2.37%.
- Household spending and housing remain subdued amid cautious consumption, low net migration, and labor market softness, though easing retail rates support budgets; high-frequency GDP indicators show steadying momentum in an early recovery phase.
- Accommodative borrowing costs from the low OCR are boosting mortgage approvals and sentiment, but business credit growth lags due to uneven confidence; overall stimulus persists below the 3% neutral rate.
- Risks are balanced, with a favorable global environment—including stronger dairy/meat exports and a softer NZ dollar—offsetting oil shocks and prior China/US trade worries; vigilance remains on second-round inflation effects.
- Forecasts point to potential OCR hikes starting late 2026 (e.g., December) or early 2027 to 2.50% by year-end if activity/inflation firms, but policy stays supportive if recovery unfolds gradually as expected.
- The next meeting is on 27 May 2026.
Next 24 Hours Bias
Weak Bullish
The Japanese Yen (JPY)
Key news events today
No major news event
What can we expect from JPY today?
The Japanese Yen remained relatively stable against the USD at around 159.64, carrying forward momentum from the Bank of Japan’s April 28 policy hold at 0.75%—a decision with three hawkish dissents pushing for hikes amid elevated inflation risks from the Middle East conflict and higher oil prices, despite lowered growth outlooks; officials like Governor Ueda hinted at future tightening, and Finance Minister Katayama reiterated intervention readiness
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
Weak Bearish
Oil
Key news events today
EIA Crude Oil Inventories (8:30 pm GMT)
What can we expect from Oil today?
Oil prices remain elevated near three‑week highs, with Brent above 110 dollars per barrel and WTI near 100 dollars per barrel, driven by ongoing supply risks from the Strait of Hormuz closure and stalled US–Iran peace talks. Geopolitical uncertainty continues to dominate the market narrative, even as OPEC releases its new Annual Statistical Bulletin, which may provide fresh data on global supply‑demand balances but is unlikely to immediately offset the current risk‑premium backdrop.
Next 24 Hours Bias
Strong Bullish
