{"id":74619,"date":"2026-05-28T17:55:02","date_gmt":"2026-05-28T07:55:02","guid":{"rendered":"https:\/\/www.icmarkets-vnl.com\/blog\/?p=74619"},"modified":"2026-05-28T17:55:03","modified_gmt":"2026-05-28T07:55:03","slug":"ic-markets-global-asia-fundamental-forecast-28-may-2026","status":"publish","type":"post","link":"https:\/\/www.icmarkets-vnl.com\/blog\/ic-markets-global-asia-fundamental-forecast-28-may-2026\/","title":{"rendered":"IC Markets Global &#8211; Asia Fundamental Forecast | 28 May 2026"},"content":{"rendered":"\n<p><strong>IC Markets Global &#8211; Asia Fundamental Forecast | 28 May 2026<\/strong><\/p>\n\n\n\n<p><strong>What happened in the U.S. session?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>AI-driven tech rally that pushed the S&amp;P 500 and Nasdaq to record closes, with Micron&#8217;s 19% jump to $1 trillion market cap as the standout story amid a global memory shortage. This optimism outweighed geopolitical concerns from Middle East tensions, though oil prices fell 3% on hopes for U.S.-Iran negotiations. Macroelectrically, May&#8217;s Consumer Confidence eased to 93.1, and jobless claims came in at 209K, signaling steady but not overheating economic conditions.<br \/><br \/><strong>What does it mean for the Asia Session?<\/strong><\/p>\n\n\n\n<p>Elevated oil prices (Brent above $100) are driven by Middle East tensions and U.S.\u2013Iran peace talk uncertainty, which are fueling global market volatility and recession fears. Currency markets are critical, with the yen drifting toward 157.00\/$ and China&#8217;s yuan strengthening to a three-year high against the dollar, signaling shifting capital flows and potential trade implications ahead of President Trump&#8217;s anticipated visit to China.<\/p>\n\n\n\n<p>\u200b<br \/><strong>The Dollar Index (DXY)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>Core PCE Price Index m\/m (12:30 pm GMT)<br \/><br \/>Prelim GDP q\/q (12:30 pm GMT)<br \/><br \/>Prelim GDP Price Index q\/q (12:30 pm GMT)<br \/><br \/>Unemployment Claims (12:30 pm GMT)<br \/><br \/>New Home Sales (2:00 pm GMT)<br \/><br \/><br \/><strong>What can we expect from DXY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The U.S. dollar is on a strong upward trajectory, bolstered by surging Treasury yields and heightened market expectations of a Federal Reserve interest rate hike due to persistent inflationary pressures from rising energy costs. The currency posted its best weekly performance in two months with a 1.2% gain, as traders now price in better-than-even odds of a Fed rate increase by December, reflecting confidence in the U.S. economy&#8217;s resilience amid global geopolitical tensions.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Federal Open Market Committee (FOMC) is widely expected to hold the federal funds rate target range steady at 3.50%\u20133.75% at its April 28\u201329, 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.<\/li>\n\n\n\n<li>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\u2014beating lowered expectations but driven partly by strike reversals\u2014and the unemployment rate edged down to 4.3% from 4.4% in February.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>March 2026&#8217;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%\u20133.50% funds rate amid softer labor but inflation upticks.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>The next meeting is scheduled for 16 to 17 June 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak Bullish<\/p>\n\n\n\n<p><strong>Gold (XAU)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>Core PCE Price Index m\/m (12:30 pm GMT)<\/p>\n\n\n\n<p>Prelim GDP q\/q (12:30 pm GMT)<\/p>\n\n\n\n<p>Prelim GDP Price Index q\/q (12:30 pm GMT)<\/p>\n\n\n\n<p>Unemployment Claims (12:30 pm GMT)<\/p>\n\n\n\n<p>New Home Sales (2:00 pm GMT)<\/p>\n\n\n\n<p><strong>What can we expect from Gold today?<\/strong><\/p>\n\n\n\n<p>Gold is expected to consolidate around $4,540\u2013$4,550 per ounce as investors weigh ongoing Middle East geopolitical risks, particularly stalled US-Iran peace talks and threats to the Strait of Hormuz, against Federal Reserve policy concerns. The metal recently fell below $4,500 on rising global rate hike bets before recovering, with persistent inflation fears keeping Treasury yields high and weighing on gold prices.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><br \/>Medium Bearish<\/p>\n\n\n\n<p><strong>The Australian Dollar (AUD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news event<\/p>\n\n\n\n<p><strong>What can we expect from AUD today?<\/strong><\/p>\n\n\n\n<p>The Australian dollar is under pressure following unexpected inflation data released on May 26 that moved rate hike chances to zero for June, with April&#8217;s CPI falling to 4.2% from March&#8217;s 4.6%. The currency briefly dipped to 71.56 US cents before stabilizing around 71\u00bd cents, as traders recalibrated their expectations for RBA monetary policy after the inflation surprise.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>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\u2011accelerated and the board judged the previous 4.10% level insufficient to re\u2011anchor the medium\u2011term outlook.<\/li>\n\n\n\n<li>The RBA lifted the cash rate from 4.10% to 4.35% at the 5 May meeting in an 8\u20131 vote, flagging that the stance is now \u201cmore restrictive\u201d and that the Council sees a low but non\u2011trivial chance of further hikes if inflation risks crystallise.<\/li>\n\n\n\n<li>Headline CPI has jumped to 4.6% year\u2011on\u2011year for the 12 months to March 2026, up from around 3.7% in February, with trimmed\u2011mean inflation still above 3.0% (about 3.3\u20133.8% depending on the series), keeping inflation clearly outside the 2\u20133% target band.<\/li>\n\n\n\n<li>Recent monthly indicators remain sticky in services, housing\u2011related costs, and discretionary spending, with January and March data showing only modest easing and some upside surprises in housing\u2011price\u2011related components, underpinning the case for a stronger\u2011than\u2011expected May hike.<\/li>\n\n\n\n<li>Global growth has been modestly revised up but remains tempered by ongoing geopolitical tensions, commodity\u2011price volatility, and elevated oil prices linked to the Middle East conflict, which directly feed into Australian import\u2011price and transport\u2011cost inflation.<\/li>\n\n\n\n<li>Markets now price the cash rate at 4.35% in June, with futures pathways suggesting a high\u2011probability 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\u2011price data.<\/li>\n\n\n\n<li>The RBA continues to emphasise its \u201cdata\u2011dependent\u201d approach under the dual mandate, seeking to bring inflation back toward target without materially undershooting growth or employment, while acknowledging that the Middle East\u2011driven shock has shifted the path of inflation and policy.<\/li>\n\n\n\n<li>The May communication leaned hawkishly neutral to hawkish, with the decision to hike by 25bp and a run\u2011of\u2011material referencing rising inflation expectations and the risk of second\u2011round effects, while still leaving room for a pause in June if upcoming monthly CPI and labour\u2011force data show a moderating trend.<\/li>\n\n\n\n<li>The next meeting is on 15 to 16 June 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Weak Bearish<\/p>\n\n\n\n<p><strong>The Kiwi Dollar (NZD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>Annual Budget Release (2:00 pm GMT)<\/p>\n\n\n\n<p><strong>What can we expect from NZD today?<\/strong><\/p>\n\n\n\n<p>The New Zealand dollar is trading in a narrow range around 0.58\u20130.59 against the US dollar, having fluctuated between 0.58325 and 0.59015 over the past week. The NZD remains subdued following the Reserve Bank of New Zealand&#8217;s May 2026 inflation expectations release, which showed rising one-year (3.41%) and two-year (2.53%) inflation expectations for Q2 2026.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Reserve Bank of New Zealand&#8217;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\u2014a 3-3 split requiring Governor Anna Breman&#8217;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.<\/li>\n\n\n\n<li>While the OCR remained unchanged, the RBNZ issued its most hawkish guidance since the cutting cycle ended, stating the OCR will &#8220;likely need to rise sooner and by more than previously envisioned.&#8221; Market pricing now indicates a 72\u201373% probability of a rate hike at the next meeting on 8 July 2026, with swaps pricing in roughly 16bps of tightening.<\/li>\n\n\n\n<li>Annual CPI inflation remained at 3.1% in Q1 2026 (above the 1\u20133% target band) for two consecutive quarters. The RBNZ now forecasts inflation to peak at 4.3% in the September 2026 quarter\u2014driven by Middle East oil shocks\u2014before returning to the 2% target midpoint by mid-2027.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>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.<\/li>\n\n\n\n<li>Markets now expect the first hike in this tightening cycle, with the MPC&#8217;s internal division suggesting any future decision may again be contentious. Policy remains below the ~3% neutral rate, but the shift from &#8220;wait-and-see&#8221; to &#8220;preemptive tightening&#8221; is now clear.<\/li>\n\n\n\n<li>The next meeting is on 8 July 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Medium Bearish<\/p>\n\n\n\n<p><strong>The Japanese Yen (JPY)<\/strong><strong><br \/><\/strong><strong><br \/><\/strong><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>Tokyo Core CPI y\/y (11:30 pm GMT)<\/p>\n\n\n\n<p><strong>What can we expect from JPY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The Japanese yen has remained under pressure in May 2026, with USD\/JPY trading around 158.9 after breaching the critical 160 level in late April, a 21-month high driven by the widening interest rate gap between the Fed and Bank of Japan, rising oil prices, and lingering Iran conflict tensions.<\/p>\n\n\n\n<p><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Policy Board of the Bank of Japan left the short\u2011term policy rate unchanged at 0.75% at the 27\u201328 April 2026 meeting, with markets broadly expecting the same level into May 2026 as the bank continues a data\u2011dependent, gradual\u2011normalisation stance.<\/li>\n\n\n\n<li>The BOJ targets the uncollateralized overnight call rate around 0.75%, signaling that any further hikes toward 1.0% will hinge on wage\u2011inflation persistence, yen stability, and real\u2011activity data rather than a pre\u2011announced timetable.<\/li>\n\n\n\n<li>JGB tapering continues on plan, with outright purchases trimmed by \u00a5400 billion quarterly through Q1 2026, then reduced to \u00a5200 billion from April onward, aiming for roughly \u00a52\u20133 trillion in monthly net purchases by mid\u20112026, adjustable if market or yen volatility spikes.<\/li>\n\n\n\n<li>Japan\u2019s 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\u2011East\u2011related shocks weigh on the pace.<\/li>\n\n\n\n<li>Core CPI (ex\u2011fresh food) is running in the mid\u20111% range y\/y, with headline inflation at about 1.5% y\/y in March 2026, while core\u2011core measures remain above 2%, reflecting sticky services\u2011side and wage\u2011driven inflation.<\/li>\n\n\n\n<li>Input\u2011cost 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.<\/li>\n\n\n\n<li>Near\u2011term real GDP may run below trend due to policy tightening and external shocks (e.g., Iran\u2011related energy risks), but negative real rates, wage gains, and targeted fiscal\/capex support should underpin a gradual rebound in consumption and investment.<\/li>\n\n\n\n<li>Medium\u2011term, overseas recovery, labor\u2011shortage\u2011driven 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\u20132027 if activity and wage\u2011inflation conditions remain aligned.<\/li>\n\n\n\n<li>The next meeting is on 15 to 16 June 2026.<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Strong Bearish<\/p>\n\n\n\n<p><strong>Oil<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><br \/><br \/>No major news event<\/p>\n\n\n\n<p><strong>What can we expect from Oil today?<\/strong><\/p>\n\n\n\n<p>Oil markets today remain in a volatile consolidation phase following the dramatic April 2026 price surge caused by the US-Iran conflict and Strait of Hormuz blockade, with crude now trading around $88\/barrel, down significantly from the April 7 high of $138\/barrel for Brent but still elevated compared to pre-conflict levels.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Weak Bearish<\/p>\n","protected":false},"excerpt":{"rendered":"<p>IC Markets Global &#8211; 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