{"id":63511,"date":"2023-05-26T16:22:13","date_gmt":"2023-05-26T06:22:13","guid":{"rendered":"https:\/\/www.icmarkets.com\/blog\/?p=63511"},"modified":"2023-05-26T16:22:13","modified_gmt":"2023-05-26T06:22:13","slug":"ic-markets-europe-fundamental-forecast-26-may-2023","status":"publish","type":"post","link":"https:\/\/www.icmarkets-vnk.com\/blog\/ic-markets-europe-fundamental-forecast-26-may-2023\/","title":{"rendered":"IC Markets Europe Fundamental Forecast | 26 May 2023"},"content":{"rendered":"\n<p><strong>IC Markets Europe Fundamental Forecast | 26 May 2023<\/strong><\/p>\n\n\n\n<p><strong>What happened in the Asia session?<\/strong><\/p>\n\n\n\n<p>The Tokyo Core CPI came in at 3.2% year-on-year, lower than the forecasted 3.4% and the previous rate of 3.5%. The weaker-than-expected data could negatively impact the Japanese Yen as it might lead to a more dovish stance from the Bank of Japan, possibly resulting in continued low-interest rates.<\/p>\n\n\n\n<p><strong>What does it mean for the Europe &amp; US Sessions?<\/strong><\/p>\n\n\n\n<p>The recent rise in the DXY may see profit-taking deepening if the US Core PCE Price Index m\/m comes in significantly lower than 0.3%. A drop towards 103.40 would not be surprising. Otherwise, stubborn inflation in the US may propel the Dollar Index higher towards 105.00<\/p>\n\n\n\n<p><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<\/p>\n\n\n\n<p><strong>What can we expect from DXY today?<\/strong><\/p>\n\n\n\n<p>The forecasted and previous data for the Core PCE Price Index m\/m indicate a 0.3% change. As a result, the upcoming release of this data is only expected to impact the USD if a substantial deviation occurs significantly. Since this gauge is the Fed\u2019s favourite measure of inflation, a lower-than-expected figure will likely weaken the USD as the central bank can justify recent dovish comments on the interest rate hike path.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The committee raised the target range for the federal funds rate to 5 to 5-1\/4 per cent. The U.S. banking system is sound and resilient.<\/li>\n\n\n\n<li>Tighter credit conditions for households and businesses may weigh on economic activity, hiring, and inflation.<\/li>\n\n\n\n<li>The committee is committed to returning inflation to its 2% objective<\/li>\n\n\n\n<li>The committee will adjust monetary policy as appropriate if risks emerge that could impede the attainment of goals<\/li>\n\n\n\n<li>Next meeting is on 14 June 2023<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Mixed<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Gold (XAU)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from Gold today?<\/strong><\/p>\n\n\n\n<p>If the Core PCE Price Index m\/m is lower than expected, it could weaken the USD and align with recent dovish comments from the Fed. This could positively affect the price of gold as it would suggest a reduced likelihood of monetary policy tightening, which can be favourable for gold.&nbsp;<\/p>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Mixed<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\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 events.<\/p>\n\n\n\n<p><strong>What can we expect from AUD today?<\/strong><\/p>\n\n\n\n<p>The upcoming release of Australia&#8217;s Retail Sales data is expected to show a 0.3% increase month-on-month (m\/m), a slight drop compared to the previous figure of 0.4%. If the actual data meets or falls below the forecasted growth rate, it could weaken market sentiment and lead to a drop in the AUD.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Official Cash Rate was increased by 25 basis points to 3.85%.<\/li>\n\n\n\n<li>Inflation in Australia has passed its peak but remains high at 7%, and it may take some time to return to the target range.<\/li>\n\n\n\n<li>GDP is forecast to increase by 1.25% this year and around 2% over the year to mid-2025.<\/li>\n\n\n\n<li>Next meeting on 6 June 2023<\/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<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Kiwi Dollar (NZD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from NZD today?<\/strong><\/p>\n\n\n\n<p>No major news is expected for the NZD today, but its price direction is likely influenced by the recent dovish RBNZ decision to raise the OCR from 5.25% to 5.50%.&nbsp;<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Monetary Policy Committee has raised the OCR from 5.25% to 5.50%<\/li>\n\n\n\n<li>The Committee believes that interest rates at a restrictive level for some time will bring inflation back within the target range while supporting maximum sustainable employment<\/li>\n\n\n\n<li>The Committee voted by a majority of five to two to increase the OCR by 25 basis points to 5.50%<\/li>\n\n\n\n<li>Interest rates must remain restrictive to ensure inflation returns to the target range while supporting maximum sustainable employment<\/li>\n\n\n\n<li>Next meeting is on 12 July 2023<\/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<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Japanese Yen (JPY)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>Tokyo Core CPI y\/y<\/p>\n\n\n\n<p><strong>What can we expect from JPY today?<\/strong><\/p>\n\n\n\n<p>The upcoming data releases for the JPY include the Tokyo Core CPI y\/y, forecasted to decrease from 3.5% to 3.4%, and the Services Producer Price Index (SPPI) y\/y, predicted to fall from 1.6% to 1.4%. If the actual data matches the forecasts, the impact on the JPY may be limited. A significantly lower-than-expected CPI may weigh on the JPY, while a lower-than-expected SPPI by a wide margin could hurt the currency.&nbsp;<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2%&nbsp;<\/li>\n\n\n\n<li>Japan&#8217;s economy is expected to recover gradually<\/li>\n\n\n\n<li>The bank will not hesitate to take additional easing measures if necessary<\/li>\n\n\n\n<li>Next meeting is on 15 June 2023&nbsp;<\/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<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Euro (EUR)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from EUR today?<\/strong><\/p>\n\n\n\n<p>Today, no major news event impacts the EUR. The previously released data for Germany shows a contraction of -0.3% in the Final GDP q\/q, indicating a decline in economic output. The German GfK Consumer Climate index improved slightly from -25.8 to -24.2, suggesting a somewhat more optimistic outlook among German consumers. These figures will likely influence the direction of the EUR price today in the absence of significant news events.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The ECB has decided to raise the three key interest rates by 25 basis points as the inflation outlook continues to be too high for too long.<\/li>\n\n\n\n<li>The ECB will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction.<\/li>\n\n\n\n<li>Renewed financial market tensions and Russia&#8217;s war against Ukraine remain significant economic downside risks.<\/li>\n\n\n\n<li>The continued resilience of the labour market could lead to higher growth than anticipated.<\/li>\n\n\n\n<li>Next meeting on 15 June 2023<\/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<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Swiss Franc (CHF)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from CHF today?<\/strong><\/p>\n\n\n\n<p>No major news events are scheduled for release from Switzerland today.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Raised policy rate to 1.5% to counter inflationary pressure and ensure price stability. The SNB may need to raise the policy rate further in the future<\/li>\n\n\n\n<li>The SNB is providing liquidity assistance to Credit Suisse, and the crisis has been halted<\/li>\n\n\n\n<li>The new inflation forecast assumes a policy rate of 1.5% and puts average annual inflation at 2.6% for 2023 and 2.0% for 2024 and 2025.<\/li>\n\n\n\n<li>Mortgage and real estate market vulnerabilities persist<\/li>\n\n\n\n<li>Next meeting on 22 June 2023<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p>Mixed<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Pound (GBP)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>Retail Sales m\/m<\/p>\n\n\n\n<p><strong>What can we expect from GBP today?<\/strong><\/p>\n\n\n\n<p>The upcoming release of the UK&#8217;s Retail Sales m\/m data is forecasted to show a growth of 0.3%, following a previous decline of -0.9%. This positive change suggests increased consumer spending and economic activity within the retail sector. The GBP is expected to benefit from the improved data.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The MPC of the BoE voted 7-2 to increase Bank Rate by 0.25 percentage points to 4.5%.<\/li>\n\n\n\n<li>The updated projections show that CPI inflation is expected to decline slightly above 1% at the two and three-year horizons, below the 2% target.<\/li>\n\n\n\n<li>CPI increased unexpectedly but is expected to fall sharply over the rest of the year due to lower energy prices.<\/li>\n\n\n\n<li>Next meeting on 22 June 2023&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p><strong>Weak bullish<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>The Canadian Dollar (CAD)<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from CAD today?<\/strong><\/p>\n\n\n\n<p>No major news event today impacts the currency, meaning the price direction will likely draw from previously released data. The Canadian dollar may face bearish pressure due to a recent contraction in quarterly corporate profits.<\/p>\n\n\n\n<p><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Bank of Canada holds its target for the overnight rate at 4.5%<\/li>\n\n\n\n<li>Labour markets remain tight with persistent price pressures, especially for services<\/li>\n\n\n\n<li>Economic growth in Q1 looks to be stronger than projected; to be weak through the remainder of this year before strengthening gradually next year<\/li>\n\n\n\n<li>Prepared to increase the policy rate further to return inflation to the 2% target.<\/li>\n\n\n\n<li>Next meeting on 7 June 2023<\/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<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Oil<\/strong><\/p>\n\n\n\n<p><strong>Key news events today<\/strong><\/p>\n\n\n\n<p>No major news events.<\/p>\n\n\n\n<p><strong>What can we expect from Oil today?<\/strong><\/p>\n\n\n\n<p>Russian Deputy Prime Minister, Alexander Novak, downplayed the likelihood of further production cuts by the OPEC+ alliance at their upcoming meeting. The OPEC+ meeting, anticipated to address production adjustments, had previously fuelled optimism and supported oil prices. However, with Novak&#8217;s dismissal of additional cuts, a decline in oil prices is likely.&nbsp;<\/p>\n\n\n\n<p>Next 24 Hours Bias<\/p>\n\n\n\n<p>Weak bearish<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n","protected":false},"excerpt":{"rendered":"<p>IC Markets Europe Fundamental Forecast | 26 May 2023 What happened [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":62297,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[196,215,339],"tags":[],"class_list":["post-63511","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fundamental-analysis","category-market-analysis","category-recent-posts"],"_links":{"self":[{"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/posts\/63511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/comments?post=63511"}],"version-history":[{"count":2,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/posts\/63511\/revisions"}],"predecessor-version":[{"id":63535,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/posts\/63511\/revisions\/63535"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/media\/62297"}],"wp:attachment":[{"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/media?parent=63511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/categories?post=63511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets-vnk.com\/blog\/wp-json\/wp\/v2\/tags?post=63511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}