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• Need to shift to responsible, proactive fiscal policy
• Will ensure trust in our finances through transparent communication with markets
• When we say responsible fiscal policy, we mean we will seek to achieve both economic growth and fiscal discipline
• We will seek to increase tax revenue by expanding GDP, will not resort to reckless fiscal spending
• Japan must exit excessively tight fiscal policy, boost domestic investment and put economy on a growth path
• Will submit bill for lowering 8% sales tax on food once debate among lawmakers reach an agreement

The hearing today ended with no done deal for Takaichi in wanting to reduce the consumption tax on food from 8% to 1%. So, that is an issue that will follow her into the autumn as the 158-day…

FUNDAMENTAL OVERVIEW

Gold opened the week higher following some positive developments over the weekend. The US halted its strikes after 13 days of attacks and Iran said it will maintain a ceasefire so long as the US remains on pause.

This has led to some optimism as traders took this latest development as an early sign of a potential de-escalation. It goes without saying that the price action will continue to be driven by US-Iran headlines.

Gold will likely remain supported amid the de-escalation expectations, but traders will keep a close eye on the headlines as things can re-escalate quickly with just a single Trump’s post.

Looking ahead, we have the FOMC rate…

• July business climate index 86.6 vs 86.0 expected
• Prior 85.6; revised to 85.7
• July current conditions 86.5 vs 87.3 expected
• Prior 87.0
• July expectations/outlook 86.7 vs 84.8 expected
• Prior 84.1; revised to 84.3

German business sentiment was seen better than expected in July, which will bring some relief to economic expectations as we begin Q3 2026.

The improved business climate is likely to do with how conditions were seen improving amid lesser uncertainty from early in the month, with the US-Iran conflict taking a backseat at the end of June. For some context, the Ifo survey typically sees the first large wave of responses arriving within the first few days of the month.

As such, that also likely contributed to the marked improvement in the…

• At least one more rate hike will be needed
• Second round effecs costly to reverse, ECB must act before they are visible
• Deterioration of outlook would warrant more tightening than now expected
• Rate hike will be warranted even if inflation situation improves somewhat

ECB's Kazimir has been one of the most hawkish members of the Governing Council and he maintains his stance with the latest remarks. In his view, at least one more rate hike will be needed to put the ECB in a better position against potential second round effects. 

He stressed that second round effects are costly to reverse once they become embedded and for this reason the ECB should act before they are visible. He also added that a deterioration of the inflation outlook would…

Monday starts off quietly, with no major scheduled events for the FX market apart from the U.S. durable goods orders m/m. On Tuesday, Japan will release the BoJ core CPI y/y, while in the U.S. the focus will be on the CB consumer confidence and the Richmond manufacturing index.

Wednesday brings Australia's inflation data, then attention will shift to the FOMC monetary policy announcement in the U.S. On Thursday, the Bank of England will announce its monetary policy decision and the U.S. will get the advance GDP q/q, core PCE price index m/m, and weekly unemployment claims data.

Finally, on Friday in Japan, attention will be on the Tokyo core CPI y/y print and the BoJ meeting. The eurozone will release the flash core CPI estimate y/y,…

FUNDAMENTAL OVERVIEW

Crude oil opened the week with a negative gap following some positive developments over the weekend. The US halted its strikes after 13 days of attacks and Iran said it will maintain a ceasefire so long as the US remains on pause.

This has led to some optimism as traders took this latest development as an early sign of a potential de-escalation. It goes without saying that the price action will continue to be driven by US-Iran headlines.

Oil prices will likely remain under pressure amid the de-escalation expectations, but traders will keep a close eye on the headlines as things can re-escalate quickly with just a single Trump’s post.

CRUDE OIL …

•  Asian Stock Markets : Nikkei up 0.32%, Shanghai Composite up 0.40% Hang Seng up 0.90% ASX up 1.24%
• Commodities : Gold at $4,092.20 (0.53%) Silver at $59.580 (1.14%), Brent Oil at 87.40 (-4.67%), WTI Oil at 84.67 (-5.20%)
• Rates : US 10-year yield at 4.630, UK 10-year yield at 5.0346, Germany 10-year yield at 3.1728

• (USD)   New Home Sales
•  628K  to  609K expected

U.S. stock futures climbed early Monday while oil prices dropped sharply after the United States and Iran paused hostilities, easing fears of a broader conflict in the Middle East. Dow futures gained 0.59%, S&P 500 futures rose 0.72%, and Nasdaq 100 futures advanced 1.16%.

Asian markets were mixed, with…

IC – Europe Fundamental Forecast | 27 July 2026

What happened in the Asia session?

Reports of a temporary easing in U.S.-Iran tensions sparked a sharp decline in crude oil prices, reducing inflation concerns and improving overall market sentiment. Asian equity markets traded mixed, with Chinese stocks supported by semiconductor gains and Japan’s Nikkei edging higher, while the Singapore dollar strengthened after the Monetary Authority of Singapore unexpectedly tightened policy. With no major economic releases during the session, investors remained focused on the busy week ahead, including policy decisions from the Federal Reserve, Bank of England, and Bank of Japan, as well as key inflation and growth data from several major…

There's going to be quite a lot for markets to digest in the week ahead. US-Iran developments are already making waves to start the new week but keep in mind that there will also be major central bank decisions and month-end trading to deal with. Adding to the mix in the days to come will be big tech earnings in the US.

After the setback from Alphabet (Google) last week, it's free game now even though US futures may be pointing up to start the week.

The big question posed by the market reaction last week was not if AI can translate to revenue. We already know that for sure and the hyperscalers have proven that. It is now a question of if the revenue from AI can be enough to cover the continued massive capital expenditure outlay.

In the case…

IC – Asia Fundamental Forecast | 27 July 2026

What happened in the U.S. session?

The U.S. session overnight was driven almost entirely by geopolitics and interest-rate expectations rather than scheduled economic data. Concerns over Middle East tensions and the potential for disruptions to global oil supplies initially lifted crude prices, while persistently high Treasury yields reinforced expectations that the Federal Reserve may need to keep monetary policy restrictive for longer. The stronger yield environment supported the U.S. dollar but weighed on gold and technology stocks, leaving the Nasdaq as the weakest major U.S. index.

What does it mean for the Asia Session?

Asian markets begin the week facing a combination of central bank…