IC Markets Asia Fundamental Forecast | 07 October 2025

IC Markets

Economic

Commodity

Forex

Summary:

What happened in the U.S. session?

Shutdown-driven data blackout kept traders focused on Fed communications while haven demand pushed gold above $3,900, oil firmed on a small OPEC+ hike, Treasury yields nudged up, and equity futures stayed positive; the biggest movers were gold, WTI, U.S. Treasuries, U.S. stock futures, and Bitcoin under the same macro narrative.

What does it mean for the Asia Session?

Tuesday’s Asian market trading will be guided by macro events such as the RBNZ rate decision, ongoing Japanese political changes, and updates from the ECB’s Lagarde later in the day. The US government shutdown continues to delay major economic releases, sustaining a cautious yet volatile trading environment across risk assets and major FX pairs.

The Dollar Index (DXY)

The US Dollar starts the week consolidating after robust gains, with global risk sentiment, Fed policy outlook, and geopolitical uncertainties all playing major roles. The balance of strong data, slowing labor momentum, and persistent inflation will dictate the Dollar’s performance, with an eye on upcoming Fed statements and global event risks.

Central Bank Notes:

● The Federal Open Market Committee (FOMC) voted, by majority, to lower the federal funds rate target range by 25 basis points to 4.00%–4.25% at its September 16–17, 2025, meeting, marking the first policy rate adjustment since December 2024 after five consecutive holds.

● The Committee maintained its long-term objective of achieving maximum employment and 2% inflation, acknowledging recent labor market softening and continued tariff-driven price pressures.

● Policymakers expressed elevated concern about downside risks to growth, citing a stalling labor market, modest job creation, and an unemployment rate drifting up toward 4.4%. At the same time, inflation remains above target, with CPI at 3.2% and core inflation at 3.1% as of August 2025; higher energy and food prices, largely attributable to tariffs, continue to weigh on headline measures.

● Although economic activity expanded at a moderate pace in the third quarter, the growth outlook has weakened. Q3 GDP growth is estimated near 1.0% (annualized), with full-year 2025 GDP growth guidance revised to 1.2%, reflecting slowing household consumption and tighter financial conditions.

● In the updated Summary of Economic Projections, the unemployment rate is projected to average 4.5% for the year, with headline PCE inflation revised up slightly to 3.1% for 2025. The Committee anticipates core PCE inflation to remain stubborn, requiring sustained vigilance and a flexible approach to risk management.

● The Committee reiterated its data-dependent approach and openness to further adjustments should employment or inflation deviate meaningfully from current forecasts. Several members dissented, either advocating a larger 50-basis-point cut or preferring no adjustment at this meeting, revealing heightened divergence within the Committee.

● Balance sheet reduction continues at a measured pace. The monthly Treasury redemption cap remains at $5B and the agency MBS cap at $35B, as the Board aims to support orderly market conditions in the face of evolving global and domestic uncertainty.

● The next meeting is scheduled for 28 to 29 October 2025.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Gold’s record-setting rally is backed by safe-haven flows and dovish monetary policy expectations, but extreme overbought signals suggest caution for traders as volatility could increase if economic or policy surprises occur. Gold prices have surged to record highs, trading just under $4,000 per ounce amid global economic and political uncertainty, strong safe-haven demand, and expectations of further U.S. interest rate cuts.Next 24 Hours BiasMedium Bullish

The Australian Dollar (AUD)

The Australian Dollar (AUD) is experiencing a mixture of stabilizing domestic factors and shifting global sentiment. The AUD/USD pair traded near 0.6593 on October 6, reflecting a marginal decline of 0.16% from the previous session and a 0.07% weakening over the past month. The currency remains range-bound, with technical resistance around 0.6610 and near-term targets above 0.6700 if global risk appetite holds.

Central Bank Notes:

● The RBA held its cash rate steady at 3.60% at its October meeting on 29–30 September 2025, marking a second consecutive pause after August’s 25 basis point cut. The move affirms the Bank’s data-dependent approach as inflation continues to trend within the target range.

● Inflation indicators remained stable through September, with headline CPI likely anchoring near 2.2%—comfortably within the 2–3% band. Insurance and housing costs remain sticky but are increasingly offset by moderation in discretionary goods.

● Trimmed mean inflation is estimated at around 2.8%, signaling underlying pressures remain contained. The Board continues to flag food and energy price volatility as short-term risks, though the broader disinflation narrative holds.

● Global conditions remain a source of uncertainty. U.S. policy expectations and uneven growth in China continue to weigh on commodities, even as trade disruptions have eased marginally since mid-year.

● Domestic growth shows resilience in the housing and services sectors, though manufacturing remains subdued. Household incomes have stabilized, but consumption remains only modest, capped by high borrowing costs.

● The labor market maintains relative tightness, though job growth has slowed notably since the first half of the year. Underutilization has ticked higher, but overall employment conditions remain supportive.

● Wage growth is plateauing, reflecting softer labour demand. Weak productivity continues to keep unit labour costs elevated, underscoring a medium-term concern highlighted repeatedly by the RBA.

● Household consumption prospects remain fragile. The combination of high rents and weak discretionary appetite suggests risks of a consumer-led slowdown in Q4 if confidence fails to rebound.

● The Board reiterated that subdued household spending poses risks to business sentiment and may dampen investment and job creation in the coming quarters.

● Monetary policy remains mildly restrictive. The RBA balanced confidence in inflation progress with caution around global and domestic demand risks, keeping further adjustments conditional on incoming data.

● The Bank reaffirmed its dual commitment to price stability and full employment, noting its readiness to act should conditions shift markedly.

● The next meeting is on 5 to 6 November 2025.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

The New Zealand Dollar is likely to remain muted today, focused on upcoming policy action and further economic releases, with traders watching for signs of either a confirmed breakout or deeper downside if sentiment sours further. The NZD remains under pressure as markets widely expect the Reserve Bank of New Zealand (RBNZ) to cut rates at its next meeting, with consensus predicting a reduction from 3.00% to 2.75%. This expectation has weighed on the currency, as cuts typically diminish investor appeal.Central Bank Notes:

● The Monetary Policy Committee (MPC) agreed to cut the Official Cash Rate (OCR) by 25 basis points to 3.00% on 20 August 2025, marking a three-year low and continuing the easing cycle after July’s pause. The vote was split 4-2, with two members advocating a 50-basis-point cut, highlighting diverging views within the Committee.

● Policymakers indicated that significant uncertainty and a stalling economic recovery prompted this move, leaving the door open for further rate cuts later in the year, with a possible trough around 2.5% by December.

● Annual consumer price index inflation rose to 2.7% in the June quarter and is expected to reach 3% for the September quarter—at the upper end of the MPC’s 1 to 3% target band—but medium-term expectations remain anchored near the 2% midpoint.

● Despite the near-term uptick, headline inflation is projected to return toward 2% by mid-2026, as tradables inflation pressures ease and significant spare capacity continues to dampen domestic price momentum.

● Domestic financial conditions are broadly aligning with MPC expectations, as lower wholesale rates have translated into reduced borrowing costs for households. However, declining consumption and investment demand, higher unemployment, and subdued wage growth reflect ongoing economic slack.

● GDP growth stalled in the second quarter of 2025, contrasting with earlier projections. High-frequency indicators point to continued weakness driven by rising prices for essentials, weakening household savings, and constrained business lending.

● The MPC cautioned that ongoing global tariff uncertainties and policy shifts, especially recent changes in US trade regulations, could amplify market volatility and present both upside and downside risks to New Zealand’s recovery.

● Subject to medium-term inflation pressures continuing to ease as projected, the MPC signaled scope for further OCR cuts, possibly down to 2.5% by year-end, consistent with the latest Monetary Policy Statement outlook.

● The next meeting is on 22 October 2025.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

The Japanese Yen is under strong selling pressure entering primarily driven by political developments with the new LDP leader Sanae Takaichi, who is seen as favoring fiscal stimulus and looser monetary policy. This has led to expectations that the Bank of Japan will hold back on interest rate hikes, contributing to yen depreciation against major currencies, especially the US dollar. The yen’s weakness is coupled with cautious bets on incoming monetary policy changes and a mixed outlook on USD/JPY movements with potential short-term rebounds but overall downward pressure in the coming days.Central Bank Notes:

● The Policy Board of the Bank of Japan decided on 17 September, by a unanimous vote, to set the following guidelines for money market operations for the inter-meeting period:

● The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.

● The BOJ will continue its gradual reduction of monthly outright purchases of Japanese Government Bonds (JGBs). The scheduled amount of long-term government bond purchases remains unchanged from the prior decision, with a quarterly reduction pace of about ¥400 billion through March 2026 and about ¥200 billion per quarter from April to June 2026 onward, aiming for a purchase level near ¥2 trillion in January to March 2027.

● Japan’s economy continues to show a moderate recovery, with household consumption supported by rising incomes, although corporate activity has softened somewhat. Overseas economies remain on a moderate growth path, with the impact of global trade policies still weighing on Japan’s export and industrial production outlook.

● On the price front, the year-on-year rate of change in consumer prices (excluding fresh food) remains in the mid-3% range. Inflationary pressures remain broad-based, with persistent cost-push factors in food and energy, alongside solid wage pass-through. However, input cost pressures from past import surges are showing early signs of easing.

● Short-term inflation momentum may moderate as cost-push effects diminish, though rent increases and service-related price gains tied to labor shortages are likely to provide support. Inflation expectations among firms and households continue a gradual upward drift.

● Looking ahead, the economy is projected to grow at a slower-than-trend pace in the near term due to external demand softness and cautious corporate investment plans. However, accommodative financial conditions and steady increases in real labor income are expected to underpin domestic demand.

● In the medium term, as overseas economies recover and global trade stabilizes, Japan’s growth potential is likely to improve. With persistent labor market tightness and rising medium- to long-term inflation expectations, core inflation is projected to remain on a gradual upward trend, converging toward the 2% price stability target in the latter half of the projection horizon.

● The next meeting is scheduled for 30 to 31 October 2025.

Next 24 Hours Bias

Strong Bearish

Oil

The latest developments for the oil market on Tuesday, October 7, 2025, revolve around OPEC+ announcing a modest increase in oil production by 137,000 barrels per day starting in November, the same increase as in October. This cautious move helped oil prices rise about 1-1.5% on Monday after some concerns over a potential supply glut. Brent crude oil was trading around $65.30 per barrel, and U.S. West Texas Intermediate crude around $61.59 per barrel.Next 24 Hours BiasWeak Bullish

Source: IC Markets

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Samantha Luan

Economic

Forex

Blizzard traps at least 550 trekkers near Everest in Tibet
Since Sunday, about 350 hikers have been led to safety
Snowstorms also hit Xinjiang, Qinghai, Gansu in western China

Efforts to evacuate more than 200 trekkers still stranded near the eastern face of Mount Everest in Tibet are expected to wrap up on Tuesday, a source familiar with the situation said, after snowstorms tore across western China.Outdoor enthusiasts have flocked to China's rugged interior since an eight-day holiday began on October 1, but a sudden blizzard over the weekend caught offguard hundreds of hikers hoping to catch a glimpse of Everest's Kangshung face.Their evacuation, which began on Monday, should be completed by Tuesday, said the source, who spoke on condition of anonymity in the absence of authorisation to speak to media on the matter. Tibet's regional government had no immediate comment.

Snow fell through Saturday in the Karma valley at an average altitude of 4,200 m (13,800 feet). On Sunday, rescuers guided to safety some 350 other hikers stranded in Tibet's remote Karma valley."Thankfully, some people ahead of us were breaking trail, leaving footprints we could follow - that made it a little easier," said Eric Wen, 41, adding that he trudged through 19 km (12 miles), most of it heavy snow, to leave the valley.

"Otherwise, it would've been impossible for us to make it out on our own."Regional authorities helped Wen and others on his expedition reach the Tibetan capital of Lhasa by Monday.First explored by Western travellers a century ago, the valley is relatively pristine. In contrast to the arid north face of the world's highest mountain, it is swathed in lush vegetation and untouched alpine forests fed by glacier melt.

North of Tibet, one trekker died of hypothermia and acute mountain sickness after being stranded by snowstorms on Sunday in a gully in the Qilian Mountains on the border of the western provinces of Qinghai and Gansu.By Monday evening, 213 in the Qilian area were pulled to safety, China Central Television (CCTV) said on Tuesday.On Tuesday, authorities further west in Xinjiang suspended hiking and camping in the lake district of Kanas in the Altai mountains.

On Sunday, police patrolling the area had encountered a group of 16 hikers, one of whom, showing symptoms of hypothermia and unable to move, was taken to hospital and is now in stable condition, CCTV said.Police have so far convinced more than 300 hikers heading for the area to turn back. On Tuesday, the broadcaster said highways had been cleared of dangerous ice and snow that had blanketed them over the weekend, stranding tourist vehicles.

Source: Reuters

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Blue River

Forex

Economic

Technical Analysis

As the USD/JPY chart shows, the Japanese yen has weakened sharply at the start of this week. Trading opened with a bullish gap, and today the exchange rate has risen to ¥150.65 per US dollar.

The yen’s decline followed the recent election, during which Japan’s ruling Liberal Democratic Party elected Sanae Takaichi as its new leader, paving the way for her to become the next prime minister. According to Reuters, Takaichi supports the late former Prime Minister Shinzo Abe’s “Abenomics” strategy, which focuses on stimulating the economy through aggressive spending and ultra-loose monetary policy.

Technical Analysis of the USD/JPY Chart

The political factor has led to a sequence of higher highs and higher lows (A→B→C→D) on the chart – and it is already evident that the next peak, E, will form above the previous one. This suggests that the USD/JPY market has entered an upward trend following a flat phase that was particularly pronounced in August.

At the same time:
→ The A low has a long lower shadow, and the D low shows signs of a double-bottom pattern, indicating strong demand.
→ The ¥149 level may serve as support going forward, marking the edge of the gap.
→ The price has broken above the key psychological level of ¥150 per dollar.
→ These reversal points justify constructing an ascending channel (shown in blue).

The chart highlights the dominance of demand, as the price remains:
→ In the upper half of the channel;
→ Above a curved support line – trajectories of this kind often appear after strong market impulses.

Given the above, it is reasonable to assume that:
→ The USD/JPY rate may continue its upward movement;
→ However, bullish momentum is weakening, as suggested by the potential bearish divergence on the RSI indicator.

It is worth noting that in February and March, the price reversed several times near ¥151 per dollar, which may act as significant resistance – adding weight to the possibility of a corrective move in USD/JPY, perhaps towards the median of the current channel.

Source: FXOpen

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Gerik

Economic

Commodity

Gold Overtakes LNG and Metallurgical Coal as Top Export

Australia's gold export revenues are expected to rise to A$60 billion ($39.6 billion) in 2025-26, surpassing liquefied natural gas (LNG) as the country's second-largest export commodity, according to a report by the Department of Industry, Science, and Resources. This marks a dramatic shift, with gold prices hitting record highs, driven by factors such as central bank purchases, interest rate cuts by the Federal Reserve, and increasing geopolitical tensions. The surge in gold prices has made it one of the top-performing commodities, with a 50% increase this year alone, reaching over $3,977 per ounce.

Gold's performance is expected to significantly offset declines in other resource revenues, particularly from iron ore. The value of Australia's total resource and energy exports is expected to fall by 4% year-on-year, totaling A$369 billion in 2025-26, with further declines projected for 2026-27. Despite the downturn in other sectors, gold's rise provides a bright spot for Australia's export economy, with projected increases in gold production expected to continue.

Economic Impact and Challenges for Other Commodities

While gold has surged, other key exports like LNG and metallurgical coal have softened, impacted by factors like the weakening of crude oil prices. Iron ore, still Australia's largest export, is facing a drop in prices despite increasing output, as global steel production remains sluggish, particularly in China. The outlook for iron ore prices is expected to ease further in the next financial year, highlighting the challenges facing Australia's broader resource sector.

The global economic uncertainty, trade barriers, and shifting investment patterns continue to weigh heavily on the overall commodity market, affecting revenue growth from metals like lithium and copper. However, the rise in gold prices, alongside other resource exports, helps maintain the resilience of Australia’s export-driven economy.

Source: Bloomberg

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Gerik

Economic

Inflation Surge Reflects Widespread Price Increases

Vietnam's CPI for the third quarter of 2025 climbed by 3.27% compared to the same period in 2024, marking a notable uptick in inflation. Key contributors to this rise included significant price hikes in housing (up 6.98%), education (3.13%), and healthcare services (12.69%). The surge in education costs, particularly in private schools adjusting tuition fees, stood out, while rising energy and housing costs also significantly impacted overall price levels.

For the month of September alone, CPI increased by 0.42%, driven primarily by broad-based price hikes across most sectors, including food, housing, and transportation. The food sector saw a 0.49% increase, and energy costs, particularly gasoline and gas, contributed to a 0.41% rise in housing and utilities.

Core Inflation Remains Under Control

Core inflation, which excludes volatile food and energy prices, rose by 3.19% over the first nine months of 2025, reflecting more manageable price increases in the underlying economy. In September, core inflation grew by 0.20% compared to the previous month. This suggests that despite the pressures from external sectors like food and energy, the broader economy is not yet experiencing runaway inflation.

Experts are optimistic that the current monetary policy is effectively controlling core inflation, with stable policies helping curb excessive price rises in non-food sectors.

External Pressure on Prices: A Push from Costs and Demand

As Vietnam heads into the final months of the year, experts foresee rising pressures from energy prices, exchange rates, and food costs, which could continue to drive inflation. High global energy prices, especially for oil and gas, are contributing to rising input costs across multiple industries. Additionally, increased demand from consumers in the final quarter could lead to further inflationary pressures.

Experts warn that if inflation expectations are not managed carefully, the government may need to adjust monetary policy and interest rates to curb rising costs. Nguyễn Bích Lâm, former Director-General of Vietnam's General Statistics Office, cautioned that Vietnam could face "cost-push inflation" driven by factors like rising electricity, fuel, and education costs, which could significantly affect consumer prices.

The government's ability to balance economic growth while managing inflation will be crucial in the coming months. With rising global energy prices and fluctuating exchange rates, Vietnam will need to ensure that these external shocks do not translate into longer-term inflationary pressures. Policymakers are urged to continue their careful management of monetary policy to avoid an overreaction that could negatively affect economic stability.

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Gerik

Economic

Commodity

Market Reaction to OPEC+ Supply Increase and Saudi Pricing Strategy

Oil prices showed a slight recovery after two consecutive days of gains. Brent crude was stable near $66 per barrel, and West Texas Intermediate (WTI) remained below $62, following OPEC+'s agreement to increase supply by 137,000 barrels per day. This decision, coupled with Saudi Arabia's unexpected move to keep its prices steady for Asian markets, surprised traders who had anticipated an increase.

The cautious stance from Saudi Arabia, the de facto leader of OPEC, seemed to reflect concerns about potential market instability, despite efforts by OPEC+ to increase output and regain market share.

Concerns Over Oversupply and Demand Weakness

Despite the modest supply increase, analysts continue to express concern over a possible surplus. August and September saw oil prices take losses, primarily driven by fears of an oversupply, as OPEC+ has been steadily increasing production while rival producers in the Americas have also been raising output.

The market is also keeping a close eye on geopolitical risks, such as the ongoing attacks on Russian energy infrastructure, which could potentially disrupt global supplies.

Oil Futures and Market Sentiment

The futures curve for Brent crude shows signs of weaker market conditions. The prompt spread the difference between the nearest futures contracts has narrowed to a 42-cent premium, down from nearly $1 earlier in September. This narrowing indicates that market participants are factoring in a looser near-term balance between supply and demand.

According to Vivek Dhar, an analyst at the Commonwealth Bank of Australia, if global inventories increase further and diesel margins weaken, oil prices could stabilize between $60 and $65 per barrel in the short term.

Given the current global production dynamics and geopolitical tensions, oil prices are expected to hover in a narrow range, with market participants carefully monitoring supply and demand fundamentals, particularly in the context of OPEC+'s decisions and broader economic signals.

Source: Bloomberg

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Samantha Luan

Stocks

Forex

Economic

● Novo Nordisk lays off staff at Clayton, NC plant, posts show

● Clayton site crucial for Wegovy production, U.S. expansion

● Clayton layoffs hit front-line manufacturing roles

● Novo announced 9,000 job cuts globally last month

Wegovy-maker Novo Nordisk has laid off dozens of employees at the largest U.S. manufacturing site for its blockbuster obesity and diabetes drugs, a Reuters review of LinkedIn posts showed, a signal of where it is making cuts in a major restructuring under new CEO Mike Doustdar.The previously unreported cuts included staff in manufacturing roles, from quality control to production line technicians, at Novo's major Clayton, North Carolina, plant and other facilities in the state, an analysis of 73 posts and profiles show.

The layoffs, while only a small part of a planned 9,000 job cuts globally, underscore how Novo is cutting back even on frontline production in the top market for Wegovy as it looks to sharpen its focus, trim costs, and claw back lost ground in fierce competition with rival Eli Lilly.The cuts, which follow earlier ones focused on the obesity education team in the U.S., come as the administration of President Donald Trump pressures pharmaceutical companies to expand U.S. drug production and create more domestic jobs.

The Danish drugmaker last year became Europe's most valuable listed company on unprecedented demand for weight-loss drugs before a sharp share price slide as sales growth slowed. It is now trying to turn around its fortunes and reduce costs and staff that bloated as it rode the Wegovy boom.A Novo spokesperson declined a Reuters request for further details beyond last month's global layoffs announcement. "This process takes time and our highest priority is to support our employees," the spokesperson said.

PLANT MAKES WEGOVY, OZEMPIC

The announced wider cuts helped boost Novo's shares, though the company has provided little detail about its plans. It said around 5,000 jobs would be cut in its native Denmark.The North Carolina cuts hit technical manufacturing workers, project coordinators, a strategic communications manager and an HR assistant, the posts revealed. Of the total, 47 directly posted they were looking for work or had been laid off.Novo's Clayton facility makes semaglutide, the active ingredient in Wegovy and diabetes drug Ozempic. It also does manufacturing steps including filling, finishing and packaging the injections. It also will play a key role in producing the new pill version of Wegovy once that becomes available.

CEO Doustdar this month heralded an ongoing $4.1 billion expansion at the North Carolina plant that employed some 2,500 people in 2024 and was expected to add 1,000 more.Reuters could not determine the exact number or the reason for the layoffs in Clayton, which came three weeks after Doustdar announced the broader restructuring.Reuters contacted about 30 of the Novo employees who posted on LinkedIn that they had been laid off. One replied, saying a non-disclosure agreement prevented them from speaking to the media.