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IC Markets Global – Europe Fundamental Forecast | 30 January 2026

What happened in the Asia session?

Asia session, markets digested the Fed’s rate hold and US policy signals, with Hang Seng rallying sharply on gold support while PSEi fell on GDP woes; FX pairs like USDJPY and EURUSD saw sharp dollar-driven swings, alongside Australia’s sticky inflation data, impacting currencies most directly amid choppy regional equities and commodity retreats.

What does it mean for the Europe & US sessions?
The Producer Price Index (PPI) for December will be released at 8 a.m. ET and the Chicago PMI for January at 9 a.m. ET, as these could signal inflation trends and manufacturing health amid Fed policy scrutiny. Earnings from major firms like Exxon Mobil, Chevron, American Express, and Verizon are also due, potentially driving energy and financial sector volatility. In Europe, watch Germany’s flash inflation and early GDP estimates for the Eurozone direction, alongside ongoing ECB patience on rates.

​
The Dollar Index (DXY)

Key news events today

Core PPI m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

What can we expect from DXY today?

The dollar stabilized modestly after a volatile week, buoyed by Bessent’s hawkish stance and steady Fed policy, but faces downside risks from Trump’s weaker-dollar leanings, tariff threats against Canada and others, and rising global tensions, with forecasts eyeing 97.19 by quarter-end before potentially dipping to 95.39 in 12 months.

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 January 27–28, 2026, meeting, marking the second consecutive pause after three 25-basis-point cuts in late 2025.
• The Committee continues to pursue maximum employment and 2% inflation goals, with the labour market remaining soft as the unemployment rate stood at 4.4% in December 2025 amid modest job gains of 50,000.
• Officials note balanced risks to growth and employment alongside sticky inflation, with CPI at 2.7% year-over-year in December 2025 and core PCE at 2.8% due to tariffs and housing pressures; headline PCE at 2.6%.
• Economic activity expanded robustly at 4.4% annualized in Q3 2025, with Q4 estimates around 5% per Atlanta Fed GDPNow, supported by consumer spending despite prior trade tensions and shutdown effects.
• 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% (down from prior 2.6%), with the dot plot signalling one more cut in 2026; January updates may reflect resilient Q4 growth.
• The Committee maintained its data-dependent approach, noting a stable but soft labour market and inflation above target, while holding rates steady at 3.50%-3.75%; dissents likely persist amid divisions on the pace of easing.​
• The FOMC continues its adjusted quantitative tightening post-December 1, 2025, conclusion of the prior program, with Treasury rolloff caps at $5 billion per month and agency MBS at $35 billion per month to maintain ample reserves.
• The next meeting is scheduled for 17 to 18  March 2026.

Next 24 Hours Bias
Medium Bearish

Gold (XAU)

Key news events today

Core PPI m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

What can we expect from Gold today?

Gold prices experienced volatility, dipping to around $5,332 per ounce after hitting fresh records above $5,400 the previous day, amid profit-taking and a stronger US dollar. Despite the pullback, gold remained on track for massive monthly gains of over 23%, fueled by safe-haven demand tied to policy uncertainty, Federal Reserve steadiness, and a weaker dollar earlier in the week.

Next 24 Hours Bias   
Strong Bullish

The Euro (EUR)

Key news events today

German Prelim CPI m/m (9:00 am GMT)

German Prelim GDP q/q (9:00 am GMT)

What can we expect from EUR today?

The euro remains in focus amid its recent surge past $1.20 against a weakening dollar, fueled by broad USD selling pressure and up 2.1% for January so far, marking its strongest run since 2017. ECB officials are growing wary, noting the strong euro risks undershooting inflation goals and prompting potential monetary easing hints at the upcoming February meeting.

Central Bank Notes:

• The Governing Council of the ECB kept the three key interest rates unchanged at its 4–5 January 2026 meeting, maintaining the main refinancing rate at 2.15%, the marginal lending facility at 2.40% and the deposit facility at 2.00%. This decision aligns with the assessment that the current stance supports medium-term price stability, as inflation edges below the 2% target while growth shows resilience amid balanced risks. Markets and commentary indicate value in holding steady, with no fixed path ahead given uncertainties in data.
• Price dynamics remain stable near target levels. Headline HICP inflation stood at 2.1% in November 2025, with projections for 1.9% in 2026 driven by base effects from energy and easing non-energy components. Services inflation persists somewhat elevated but trends toward moderation, alongside contained food pressures.
• December 2025 Eurosystem staff projections confirm headline inflation at 2.1% for 2025, declining to 1.9% in 2026 and 1.8% in 2027 before nearing 2% in 2028. Downside risks from soft producer prices and anchored expectations offset potential upsides from geopolitics or fiscal measures.
• Euro area GDP growth remains resilient at subdued levels, with Q3 2025 at 0.3% qoq and forecasts around 1.2-1.4% for 2025-2027. Surveys signal stabilization, bolstered by public investment and external demand against softer private spending.
• The labour market stays tight overall, with unemployment steady at 6.4% through October 2025, near historic lows and solid participation. Real incomes support consumption as inflation eases, with credit conditions aiding gradual household and firm expansion.
• Business sentiment reflects caution over US policy, trade tensions, and tariffs, tempered by easing supply chains and a competitive euro. Export sectors gain a modest lift, while domestic drivers like investment build momentum.
• The Governing Council will continue to make data-dependent decisions meeting by meeting, assessing inflation outlook, underlying trends, and transmission. Both hikes and cuts remain possible based on data, avoiding preset paths amid uncertainties.
• Balance sheet normalisation proceeds steadily, with APP and PEPP portfolios shrinking post-reinvestment halts, at a pace deemed suitable without market strain.

​The next meeting is on 4 to 5 February 2026

Next 24 Hours Bias
Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news event

What can we expect from CHF today?

The Swiss Franc remains near decade-highs versus the USD (around 0.767-0.768), bolstered by its safe-haven status amid US trade unpredictability, Trump-era fiscal signals weakening the dollar, and global caution ahead of Fed decisions—prompting SNB vigilance but no immediate action, with the currency up sharply over the past month and year.

Central Bank Notes:

• At its 11 December 2025 monetary policy assessment, the Swiss National Bank (SNB) is widely expected to leave the policy rate unchanged at 0%, extending the pause that began in September as the Governing Board judges that current settings are sufficient to keep inflation near, but still below, its target while avoiding an unnecessary move into negative rates.
• Recent data show that the tentative rebound in Swiss inflation has stalled, with headline CPI easing from 0.1% year‑on‑year in October to 0.0% in November and core inflation slipping to about 0.4%, reinforcing the view that underlying price pressures remain very weak and that deflation risks, while contained, have not fully disappeared.
• The SNB’s conditional inflation forecast is likely to remain close to the September projections, with inflation still seen averaging roughly 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027 under an unchanged policy rate path, though the latest CPI prints argue for a slightly lower near‑term profile and keep open the option of renewed easing if activity or prices weaken further.
• The global backdrop has deteriorated further, as continuing U.S. tariff actions and softer external demand weigh on world trade, while uncertainty in key European and U.S. markets for Swiss exports persists, leaving the SNB cautious about the growth outlook despite Switzerland’s relatively resilient domestic demand.
• Business and labour-market sentiment in export‑oriented manufacturing remains subdued, with firms reporting pressure on margins from the still‑strong franc and softer foreign orders, although the broader economy is still expected to grow at around 1–1.5% in 2025 and unemployment only drifting up gradually from low levels.
• The SNB continues to stress its willingness to act if deflation risks re‑emerge, reiterating that it can ease policy through renewed rate cuts or targeted foreign‑exchange intervention if necessary, while also highlighting its commitment to transparent communication, including the publication of detailed minutes from recent assessments and ongoing dialogue with international partners on FX policy

The next meeting is on 19 March 2026.

Next 24 Hours Bias
Strong Bullish

The Pound (GBP)

Key news events today

No major news event

What can we expect from GBP today?

The British pound softened slightly against the US dollar to around 1.3761, retreating from multi-month peaks near $1.38 amid dollar volatility and trader reassessments of UK economic strength following robust retail sales and PMI beats last week. While resilient UK data has curbed Bank of England rate cut bets and supported GBP’s outperformance among G-10 currencies, caution prevails with potential pullbacks toward 1.35 if supports fail.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) will meet on 18 December 2025, with the current Bank Rate standing at 4.00 per cent after being held in a close 5–4 vote at the 5 November meeting. Market pricing and analyst commentary point to a high risk of a 25‑basis‑point cut to 3.75 per cent, but this remains conditional on incoming inflation and labour‑market data, so the December note should be treated as pre‑decision guidance rather than an ex‑post summary.
• The BoE is expected to leave its quantitative tightening (QT) framework broadly unchanged through year‑end, maintaining the lower reduction pace in gilt holdings that was set earlier in 2025. Official communications still characterise the existing QT path as consistent with a restrictive stance, with policymakers stressing that balance‑sheet reduction will remain gradual and sensitive to market‑liquidity conditions.
• Headline CPI inflation eased to 3.6 per cent year‑on‑year in October 2025, down from 3.8 per cent in September, helped by softer energy and goods prices, though it remains almost twice the 2 per cent target. Underlying inflation pressures, particularly in services, have continued to moderate only slowly, so the MPC’s central projection still envisages inflation moving closer to, but not yet reaching, 3 per cent over the course of 2026, contingent on further normalisation in energy and wage dynamics.
• UK economic activity remains weak heading into the December meeting, with the labour market showing further signs of slackening. The unemployment rate has risen toward just above 5 per cent on the latest three‑month figures to October, while overall regular pay growth has slowed to around the mid‑4 per cent range, reinforcing the view that domestic cost pressures are gradually easing.
• External conditions continue to cloud the outlook, with fragile global growth and fluctuating commodity prices contributing to bouts of financial‑market volatility. The MPC has highlighted that renewed global energy or food price shocks could temporarily slow the pace of disinflation, but such risks are currently judged unlikely to derail the medium‑term downward trajectory for inflation if domestic demand stays subdued.
• The balance of risks around the inflation outlook remains finely poised. Downside risks are linked to persistently weak domestic demand and rising unemployment, while upside risks come from still‑elevated inflation expectations, sticky services inflation, and the possibility that structural changes in the labour market leave less slack than conventional indicators suggest.
• Overall, the MPC’s stance going into December is restrictive but increasingly open to a gradual easing cycle, with any rate cuts expected to be measured and data‑dependent. Policymakers have reiterated that the Bank Rate will need to stay in restrictive territory until they are confident inflation is on a sustainable path back to the 2 per cent target, and they have signalled that the profile of cuts, once started, is likely to be shallow rather than rapid.
• The next meeting is on 5 February 2026.

  Next 24 Hours Bias
  Medium Bullish

The Canadian Dollar (CAD)

Key news events today

GDP m/m (1:30 pm GMT)

What can we expect from CAD today?

The Canadian dollar steadied near its recent highs around 1.35 per USD, driven by BoC’s stable policy and energy market resilience, but faced headwinds from renewed US trade threats and geopolitical risks; analysts eye 1.37 by quarter-end amid modest growth forecasts.
​
Central Bank Notes:

• The Governing Council left the target for the overnight rate unchanged at 2.25% at its 28 January 2026 meeting, consistent with market expectations and reinforcing the pause in easing after the December hold. The Bank highlighted ongoing global trade uncertainties, including U.S. policy risks, but noted a steadier external environment with no immediate need for policy shifts amid fragile world demand.
• Uncertainty from U.S. tariffs continues to cloud business confidence, yet Canadian manufacturing PMI and export orders have stabilised further, with backlogs modestly increasing despite restrained investment. Recent data indicate goods exports, particularly energy, provided ongoing support, though firms remain selective in expansion plans.
• Canada’s economy maintained momentum into late 2025 and early 2026, with Q4 GDP estimates around 2.0-2.5% annualised after Q3’s 2.6% rebound, driven by crude oil exports, public spending, and partial service sector recovery. January flash indicators suggest a balanced start to Q1, though weather disruptions slightly tempered output gains.
• Services activity strengthened, with PMI holding above 50 and gains spreading to tech, tourism, and professional sectors; however, consumer services stayed uneven due to persistent high prices curbing non-essential spending despite wage growth. The Bank views this broadening as a sign of structural adjustment progressing.
• Housing markets edged firmer nationally, with resales and prices up modestly in December-January on lower rates and steady demand, though major cities face renewed pressures tempered by strict lending rules and affordability hurdles. The Bank expects this stabilisation to persist without overheating.
• CPI inflation held near 2.2% year-over-year in December 2025 and into January 2026 estimates, within the 1-3% band, while core metrics like CPI-median and trim eased toward 2.8%, signaling waning underlying pressures despite shelter and energy volatility. This supports the Bank’s confidence in target convergence.
• Officials reaffirmed the 2.25% rate as appropriate for sustaining 2% inflation and economic adjustment, with no near-term cuts anticipated absent growth or inflation shocks. Focus shifts to Q1 data durability, core trend sustainability, and trade policy clarity.
• The next meeting is on 25 March 2026.

Next 24 Hours Bias
Medium Bullish

Oil

Key news events today

No major news event

What can we expect from Oil today?

Oil prices showed volatility, dipping slightly after a strong rally driven by geopolitical tensions. Brent hovered above $70 per barrel earlier in the week before retreating, while WTI traded around $65, reflecting a monthly gain poised to be the largest in years amid US threats against Iran.

Next 24 Hours Bias
Medium Bearish

The post IC Markets Global – Europe Fundamental Forecast | 30 January 2026 first appeared on IC Markets | Official Blog.

• Prior 0.0%

As a whole, the German economy also posted 0.3% growth in GDP for the year 2025. That as private and government consumption expenditures, in particular, increased. Meanwhile, it was a very turbulent year for foreign trade – not least due to Trump’s tariffs surely. So, that definitely presented a more challenging environment for the German economy to navigate through.

The bright side is that higher and more stubborn price pressures are not quite eating too much into overall demand, with the services sector at least keeping firmer. The manufacturing side of things remain in struggling territory, so that will continue to be a bit of a pain as we get into the new year.

For now, Europe’s largest economy is keeping somewhat resilient and the hope is that overall conditions can hang in there all the way through until we see the fiscal tailwind kick into gear. However, a softening labour market picture could pose some concerns in the months ahead. So, that will be something to be wary about.

That as stagflation risks remain a potential point of worry for Germany and perhaps the euro area as we get into 2026.

This article was written by Justin Low at investinglive.com.

US Tech Stocks Drop – Nasdaq down 0.7%
US equity markets finished mixed overnight, with technology stocks leading the declines as renewed AI-related concerns combined with a disappointing earnings result from Microsoft weighed on sentiment. The Nasdaq slid 0.72% to 23,685, while the broader market proved more resilient. The S&P 500 edged 0.13% lower to 6,696, and the Dow Jones managed a modest gain of 0.11% to close at 49,071. The US dollar softened again, with the dollar index falling 0.30% to 96.16, while US Treasury yields drifted lower across the curve. The 2-year yield slipped 1.2 basis points to 3.559%, and the 10-year yield also eased 1.2 basis points to 4.231%. Commodities once again dominated the day. Oil prices surged sharply on rising fears of a potential US strike on Iran, with Brent crude jumping 3.23% to $70.61 a barrel and WTI climbing 3.42% to $65.37. Precious metals were equally volatile, with Gold pushing to another fresh record up at $5,594.82 before fading late in the session to ultimately finish 0.10% lower at $5,393.99.

Oil remains in focus for Traders
Oil markets remain volatile and strategically sensitive to geopolitical developments — especially in the Middle East — which have driven prices higher in the very short term. However, structural oversupply pressures and demand uncertainties still cloud the medium-term outlook, keeping the market in a tug-of-war between upward risk premiums and fundamental bearish forces. For now, though, geopolitical risks in general, and an escalation of issues between the US and Iran in particular, look to be dominating flows that have seen both Brent and WTI hit 5-month highs above $70 and $66 a barrel, respectively. TACO traders may be looking to fade these recent strong rallies if they feel that President Trump may get a deal through in the coming days; however, for now, the risk side of sentiment is winning the battle, and we could see further moves north in the coming sessions.

Busy Data Calendar Day Ahead for Traders

It looks like being another busy trading day to close out the week for investors today, with data releases due across all three of the sessions today, in addition to more expected geopolitical updates. In Asia, Japan’s Tokyo Core CPI is due out early in the piece, with the market expecting a +2.2% print. Europe will see Germany’s preliminary CPI data released throughout the day (exp 0.0%), while GDP (exp +0.2% q/q) is also released midway through the session. The New York session will see a big data drop early in the day, with Canadian GDP (exp +0.1% m/m) released alongside US PPI (+0.2% m/m) and Core PPI (exp +0.2% m/m) data. These key data updates should see some moves in their respective markets; however, again, newswires and previous volatility in key products should dominate sentiment before we hit the end of what has been a very long week.

The post General Market Analysis – 30/01/26 first appeared on IC Markets | Official Blog.

IC Markets Global – Asia Fundamental Forecast | 30 January 2026

What happened in the U.S. session?

During the U.S. session on January 29, 2026, key macroeconomic data releases included weekly initial jobless claims ticking down slightly to 209,000 (from a revised 210,000 prior week), somewhat above economist expectations of around 206,000, and the November trade deficit widening dramatically to $56.8 billion—the largest monthly increase in nearly 34 years due to imports surging 5% to $348.9 billion while exports fell 3.6% to $292.1 billion.

What does it mean for the Asia Session?

Asian markets may open mixed on Friday, pressured by recent slips and Indonesian capital flight, but Tokyo CPI and China PMIs will dominate watch for yen/JPY reactions, and PMI beats to lift sentiment, while U.S. tariffs, oil geopolitics, and gold strength add cross-asset ripples.

The Dollar Index (DXY)

Key news events today

Core PPI m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

What can we expect from DXY today?

The US dollar continued its weakening trend, with the DXY index hovering around 96.37 after slipping 0.3% on Thursday amid fading support from Treasury Secretary Scott Bessent’s strong-dollar remarks. President Trump’s comfort with a weaker greenback, contrasted by Bessent’s dismissal of intervention rumors, fueled volatility.

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 January 27–28, 2026, meeting, marking the second consecutive pause after three 25-basis-point cuts in late 2025.
• The Committee continues to pursue maximum employment and 2% inflation goals, with the labor market remaining soft as the unemployment rate stood at 4.4% in December 2025 amid modest job gains of 50,000.
• Officials note balanced risks to growth and employment alongside sticky inflation, with CPI at 2.7% year-over-year in December 2025 and core PCE at 2.8% due to tariffs and housing pressures; headline PCE at 2.6%.
• Economic activity expanded robustly at 4.4% annualized in Q3 2025, with Q4 estimates around 5% per Atlanta Fed GDPNow, supported by consumer spending despite prior trade tensions and shutdown effects.
• 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% (down from prior 2.6%), with the dot plot signaling one more cut in 2026; January updates may reflect resilient Q4 growth.
• The Committee maintained its data-dependent approach, noting a stable but soft labor market and inflation above target, while holding rates steady at 3.50%-3.75%; dissents likely persist amid divisions on the pace of easing.
• The FOMC continues its adjusted quantitative tightening post-December 1, 2025, conclusion of prior program, with Treasury rolloff caps at $5 billion per month and agency MBS at $35 billion per month to maintain ample reserves.
• The next meeting is scheduled for 17 to 18 March, 2026.

Next 24 Hours Bias

Weak Bearish 

Gold (XAU)

Key news events today

Core PPI m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

What can we expect from Gold today?

Gold’s rally to unprecedented levels above $5,500 continued into late January 2026, driven by dollar weakness, Fed policy expectations, and global risks, though profit-taking caused a sharp intraday drop on January 29; weekly outlooks point to short-term consolidation near $4,675 support before resuming upward momentum potentially exceeding $5,545. Silver, often correlated, also hit records above $120 before easing.

Next 24 Hours Bias
Strong Bullish

The Australian Dollar (AUD)

Key news events today

No major news event

What can we expect from AUD today?

The AUD/USD hovered near 0.704 amid volatility from sticky Australian inflation (3.6% YoY CPI), which bolstered earlier gains but faced pullbacks ahead of the Fed’s policy update; forecasts eye a short-term correction to 0.6715 support before potential upside to 0.7245, reflecting ongoing bullish momentum from commodity strength and RBA rate hike expectations.

​
Central Bank Notes:

• The Reserve Bank of Australia held its cash rate steady at 3.60% at the November 2025 policy meeting, adopting a cautious tone amid a surprise uptick in inflation data for the September quarter. This marks the fourth consecutive pause since the 25 basis point cut in August. The Board attributed some of the inflation rise to temporary factors like higher petrol prices and council rates, but noted signs of more persistent pressures from consumer demand.​
• Policymakers emphasized vigilance on inflation, with trimmed mean inflation expected to remain elevated in the near term before nearing the 2–3% target midpoint by mid-2027. Recent data showed underlying inflation staying above target until at least the second half of 2026, prompting upward revisions to forecasts. Capacity pressures are seen as slightly more pronounced than previously assessed, delaying any easing.
• Headline CPI for the September quarter exceeded expectations, driven partly by temporary items, while underlying measures signal ongoing stickiness. The shift to monthly CPI reporting, with the first full edition in November 2025, will enhance real-time inflation monitoring. Housing and services remain resilient contributors to price pressures.
• Domestic demand shows firmness in services alongside below-trend growth elsewhere, with capacity pressures not expected to ease significantly. The labor market is gradually softening, with unemployment projected to stabilize around 4.4%, though wage growth and productivity dynamics keep unit labor costs a concern. Household spending faces headwinds from high borrowing costs.​
• Global risks include geopolitical tensions and commodity volatility, set against modestly revised-up world growth outlooks. The Board describes its policy as mildly restrictive and data-dependent, balancing inflation control with employment goals. No rate hike was considered despite the inflation surprise.
• Monetary policy remains mildly restrictive to address lingering price stability risks amid household and global vulnerabilities. Communications reaffirm the dual mandate of 2–3% inflation and full employment, with readiness to adjust based on incoming data.​
• Market expectations point to the cash rate holding through early 2026, with a possible modest cut to 3.3% mid-year if inflation eases as forecast. The new monthly CPI data will be key for timely insights.
• Monetary policy remains mildly restrictive, balancing progress on price stability against vulnerabilities in household demand and global outlook. Board communications reaffirm a dual mandate: price stability and full employment, while underscoring readiness to respond should risks materialize sharply.
• Analysts generally expect the cash rate to remain at current levels through early 2026, with only modest cuts possible later in the year if inflation moderates. The new monthly CPI release (first full edition Nov 2025) will be watched closely for timely signals on price trends.
• The next meeting is on 2 to 3 February 2026.

Next 24 Hours Bias

Strong 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) showed resilience amid recent market volatility as of late January 2026. The NZD/USD pair traded around 0.6069, marking a modest 0.13% gain from the prior session, building on a broader monthly strengthening of 4.76% driven by hotter-than-expected Q4 inflation data at 3.1%, which exceeded the Reserve Bank of New Zealand’s target band and fueled expectations of potential rate hikes later in the year.

Central Bank Notes:

• The Monetary Policy Committee (MPC) left the Official Cash Rate (OCR) unchanged at 2.25% at its 26 November 2025 meeting, following the widely anticipated 25-basis-point reduction from 2.50%, and signaled that policy is now firmly in stimulatory territory while keeping the option of further easing on the table if needed.
• The decision was again reached by consensus, with members judging that the cumulative 325 basis points of easing over the past year warranted a period of assessment, even as several emphasized a willingness to cut further should incoming data point to a more protracted downturn or renewed disinflationary pressures.
• Headline consumer price inflation is projected to hover near 3% in late 2025 before gradually easing toward the 2% midpoint of the 1–3% target band through 2026, supported by contained inflation expectations around 2.3% over the two-year horizon and an expected pickup in spare capacity.
• The MPC noted that domestic demand remains subdued but shows tentative signs of stabilisation, with softer household spending and construction only partially offset by improving services activity; nevertheless, policymakers still expect services inflation to ease as wage growth moderates and the labour market loosens further over the coming year.
• Financial conditions continue to ease as wholesale and retail borrowing rates reprice to the lower OCR, contributing to gradually rising mortgage approvals and improving housing-related sentiment, although broader business credit growth remains patchy and sensitive to uncertainty about the durability of the recovery.
• Recent data confirm that GDP momentum is weak but not deteriorating as sharply as earlier in 2025, with high-frequency indicators pointing to a shallow recovery from a low base and ongoing headwinds from elevated living costs and fragile confidence weighing on discretionary consumption and investment.
• The MPC reiterated that external risks remain skewed to the downside, particularly from softer Chinese demand and uncertainty around United States trade policy, but noted that a lower New Zealand dollar continues to provide some offset via improved export competitiveness and support for tradables inflation.
• Looking ahead to early 2026, the Committee maintained a mild easing bias, indicating that a further cut toward 2.00–2.10% cannot be ruled out if activity fails to gain traction or if inflation undershoots projections, but current forecasts envisage the OCR remaining near 2.25% for an extended period, provided inflation converges toward target and the recovery proceeds broadly as expected.
• The next meeting is on 18 February 2026.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news event

What can we expect from JPY today?

The yen clings to gains from BoJ-Fed divergence but faces headwinds from Japan’s fiscal concerns, aggressive spending plans, and a rebounding dollar ahead of Fed comments, keeping USD/JPY volatile around 153-154 with bears cautious due to intervention risks.

Central Bank Notes:

• The Policy Board of the Bank of Japan meets on 22–23 January 2026, with markets fully expecting the short-term policy rate to remain at 0.75%, following the December 2025 hike, as the bank assesses the impact of prior tightening while emphasizing gradual, data-dependent adjustments.
• The BOJ will continue targeting the uncollateralized overnight call rate around 0.75% and signal that future rate hikes depend on the effects of recent increases on bank lending, corporate financing, and economic activity, with some policymakers eyeing a possible move as early as April.
• JGB purchase tapering proceeds on schedule, with outright purchases reduced by ¥400 billion per quarter through March 2026, then ¥200 billion per quarter from April to June 2026, aiming for around ¥2 trillion monthly in Q1 2027, with flexibility if market conditions worsen.
• Japan’s economy showed recovery signs after the Q3 2025 contraction, with Q4 2025 GDP growth estimated positively amid export strength, though business sentiment among manufacturers softened to a six-month low of +7 in January 2026 due to weaker overseas demand.
• Core consumer inflation (excluding fresh food) eased to 2.3% year-on-year in December 2025 Tokyo CPI, down from 2.8-3.0% peaks earlier, while core-core (excluding fresh food and energy) stood at 2.6%, both above the 2% target but with moderating cost pressures.
• Near-term input costs continue easing from faded import surges, but services inflation and steady wage gains with early 2026 negotiations targeting 5% hikes sustain price momentum; medium-term inflation expectations remain anchored above 2%, tilting upside risks.
• In the coming quarters, real growth may moderate below potential amid tighter conditions and yen weakness, but accommodative real rates, real wage gains, and fiscal support are poised to bolster private consumption and investment recovery.
• ​Medium-term, stabilizing overseas demand and tight labor markets should drive wage growth and keep core inflation gradually around or above 2%, allowing cautious rate normalization if financial conditions stay supportive.
• The next meeting is scheduled for April 2026.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

No major news event

What can we expect from Oil today?

Oil markets show stability amid recovering US production disruptions and heightened geopolitical tensions. Brent crude hovers around $65 per barrel, while WTI trades near $60-$63, supported by a recent four-month high driven by winter storm impacts and US-Iran escalation.

Next 24 Hours Bias
Medium Bullish

The post IC Markets Global – Asia Fundamental Forecast | 30 January 2026 first appeared on IC Markets | Official Blog.

Inflation expectations:

• 1-year ahead 2.8% vs 2.8% prior
• 3-year ahead 2.6% vs 2.5% prior
• 5-year ahead 2.4% vs 2.2% prior
• Full report here

“Respondents in lower income quintiles continued to report on average slightly higher inflation perceptions and short-horizon expectations than those in higher income quintiles, a trend observed since 2023. However, the broad evolution of inflation perceptions and expectations remained relatively closely aligned across income groups.”

Actual inflation data eased recently which prompted the market to pare back the slightly hawkish bets it started to take in December. Having said that, growth has been surprising to the upside and the labour market continues to remain resilient with the unemployment rate hovering around record lows.

The German fiscal boost, the ECB rate cuts and the easing in uncertainty seen in 2025 could all be positive drivers for growth and eventually for inflation. That’s why the ECB members have been keeping all options on the table and giving the same odds to both a rate cut or a rate hike as the next move.

This article was written by Giuseppe Dellamotta at investinglive.com.

• Prior +0.1%

This article was written by Justin Low at investinglive.com.

The other German state releases around the same time as per the following:

• Hesse CPI +% vs +2.2% y/y prior
• North Rhine Westphalia CPI +2.0% vs +1.9% y/y prior
• Saxony CPI +2.1% vs +1.9% y/y prior
• Baden Wuerttemberg CPI +2.1% vs +1.9% y/y prior

The annual figures here are all higher than seen in December, which fits with estimates for the national reading later. German headline annual inflation is expected to rise to 2.0% to start the year, up from 1.8% previously. Based on the state figures, we should expect that estimate to come in around 2.0% to 2.1% at the balance.

But as always is the case, the key statistic to watch will be the core annual inflation estimate once again. Overall, that was seen at 2.8% in 2025 and the more stubborn price pressures in Europe’s largest economy here is still posing some trouble for the ECB.

Services inflation is the main culprit, seen at 3.5% for the year and that is preventing the central bank from fully pursuing a push towards their desired 2% inflation target level.

As such, this will continue to be a key spot to watch in terms of inflation developments for the euro area as it remains the major issue for the ECB in trying to manage policy setting.

This article was written by Justin Low at investinglive.com.

• Prior 3k
• Unemployment rate 6.3% vs 6.3% expected
• Prior 6.3%

This article was written by Justin Low at investinglive.com.

• Prior 3k
• Unemployment rate 6.3% vs 6.3% expected
• Prior 6.3%

This article was written by Justin Low at investinglive.com.

• Prior +2.9%
• HICP +2.5% vs +2.4% y/y expected
• Prior +3.0%

Headline annual inflation shows some added volatility, with it reflecting a marked drop in January. That said, core annual inflation is what remains the more important statistic and that is seen steady at 2.6%. As such, this continues the narrative from the end of last year in that Germany and Spain are the two notable economies with higher and more stubborn price pressures at the moment in the euro area.

This article was written by Justin Low at investinglive.com.

• Prior +0.6%

As has been the case for quite some time now, Spain continues to be one of the bright spots in the euro area economy. Quarterly growth outperformed estimates at the end of last year, reaffirming more robust growth overall. As a whole, Spain’s full year 2025 GDP is seen growing by 2.8% based on the initial reading. Solid stuff.

The only downside now is that inflation is still on the higher side but at least it is being accompanied by a stronger economic showing. That unlike *coughs* Germany *coughs*, which remains the biggest problem for the ECB to solve.

This article was written by Justin Low at investinglive.com.

• Prior +0.5%

The year-on-year reading for December was for a decline of 2.3%, marking the sharpest year-on-year drop since March 2024. And overall in 2025, the annual average for German import prices showed a decrease of 0.3% compared to 2024.

The breakdown shows the same story that it has been all year, that being the biggest drag on the overall development was the decline in energy prices. That was the same case for the monthly reading as well, with December reflecting a 4.6% drop in energy prices compared to November. If you strip that out, import prices were actually up 0.3% on the month instead.

And looking over to the year-on-year estimate, it would just be a 0.3% decline if you exclude energy prices from the calculations.

It’s the same as when we look at the annual average too. For some context, the 0.3% drop in 2025 isn’t as bad as the 1.2% drop in 2024 and 6.5% decline in 2023 before that. But when you strip out energy prices, the import price index was 0.7% higher on average in 2025 than in the previous year.

The overall breakdown shows that prices for capital goods were also below the 2024 level in 2025 (-0.2%). In contrast, agricultural goods (+4.3%), consumer goods (+1.9%), and intermediate goods (+0.3%) were on average more expensive than in the previous year.

This article was written by Justin Low at investinglive.com.