[Holiday Market Review]

SMM April 7 News:

Metals market:

From April 4 to April 6, China observed the Qingming Festival holiday, with the domestic market closed and trading suspended.

The overseas market was closed on April 3 for Good Friday and again on Monday, April 6 for Easter Monday, with trading suspended.

COMEX gold and COMEX silver were closed on April 3 for Good Friday. On April 6, the COMEX market operated independently; as of the overnight close, COMEX gold fell 0.08% and COMEX silver fell 0.15%.

As of 6:47 AM on April 7, overnight closing prices

Macro front

China:

[National Consumer Goods Trade-in Work Promotion Video and Teleconference Held in Beijing]On April 3, the Ministry of Commerce held a national consumer goods trade-in work promotion video and teleconference, summarizing Q1 progress and achievements in consumer goods trade-in and deploying key tasks for boosting consumption in the next phase. Vice Minister of Commerce Sheng Qiuping attended and delivered a speech. Zhejiang, Henan, Chongqing, and Shenzhen made exchange remarks on consumption expansion efforts. Jiangxi and Hunan provided explanations on the slow progress of subsidy fund disbursement for consumer goods trade-in. The meeting emphasized that all regions and relevant departments should continuously optimize the implementation mechanism of the trade-in policy, and ensure orderly and effective policy implementation. Efforts should be made to accelerate efficient direct connection between central and local platforms, strengthen data connectivity and exchange, continuously improve subsidy review and fund disbursement efficiency, and enhance consumer participation experience. A strict approach must be maintained to rigorously prevent and investigate subsidy fraud, severely crack down on illegal activities, and ensure subsidy funds are used effectively and deliver real results. (Jin10 Data APP)

[Q1 Consumer Goods Trade-in Sales Exceeded 430 Billion Yuan]According to the Ministry of Commerce, from January to March this year, consumer goods trade-in sales exceeded 433.17 billion yuan, benefiting 60.933 million person-times. Specifically, auto trade-in sales reached 228.69 billion yuan. From January to March, a total of 1.408 million subsidy applications were received for auto trade-in, driving new auto sales of 228.69 billion yuan. Among them, retirement and renewal subsidy applications totaled 403,000, driving sales of 51.96 billion yuan; replacement and renewal subsidy applications totaled 1.005 million, driving sales of 176.73 billion yuan. Home appliance trade-in and digital and smart product sales reached 204.48 billion yuan. From January to March, 6 categories of home appliance trade-in and digital and smart product purchases totaled 59.525 million units, driving sales of 204.48 billion yuan. Among them, home appliance trade-in sales reached 23.205 million units, driving sales revenue of 95.43 billion yuan; digital and smart product new purchases reached 36.32 million units, driving sales revenue of 109.05 billion yuan. (Jin10 Data APP)

[NFRA: Promoting the Construction of a Financial Service System Aligned with the Full Life Cycle Financing Needs of Future Industries]On April 1, the NFRA held a Party Committee theoretical study centre group collective (expanded) study session. Li Yunze emphasized the need to focus on core financial operations, promote the construction of a financial service system aligned with the full life cycle financing needs of future industries, precisely serve the development of future industries such as artificial intelligence through sci-tech finance, and inject new momentum into Chinese-style modernization. He stressed the need to coordinate development and security, deeply understand and grasp the development trends of AI, steadily and orderly advance pilot AI applications in the financial industry, establish and improve AI safety development and application governance frameworks, and promote high-quality development of digital finance. He also emphasized strengthening technology empowerment, launching the high-quality construction of the "Financial Supervision Project," consolidating technological support for financial regulation, continuously improving the level of digital and intelligent supervision and penetrating regulatory capabilities, and effectively enhancing the quality and efficiency of strong and strict regulation. (Jin10 Data APP)

[Ministry of Commerce and 5 Other Departments: Developing "AI + E-commerce," Guiding E-commerce Enterprises to Strengthen R&D and Application of AI Large Models] The Ministry of Commerce and 5 other departments issued guiding opinions on better serving the real economy and promoting high-quality development of e-commerce. It mentioned strengthening innovation leadership to help achieve a higher-level dynamic supply-demand balance. Accelerating technology innovation and application. Supporting leading e-commerce enterprises to increase R&D investment, strengthen core technology breakthroughs in key areas, and build an innovation ecosystem of "industry-research collaboration and learning-application transformation." Developing "AI + e-commerce," guiding e-commerce enterprises to strengthen R&D and application of AI large models and other technologies, optimizing consumer experience, reducing operating costs, and improving circulation efficiency. Encouraging e-commerce enterprises to use technology for good, coordinating the interests of all parties to optimize algorithm rules. Strengthening judicial protection of technological achievements in the e-commerce sector, exploring the establishment of rules for evidence disclosure and evidence obstruction exclusion, and appropriately reducing the burden of proof on rights holders. Conducting selection of e-commerce technology innovation application cases and deepening digital technology applications. (Ministry of Commerce) (Jin10 Data APP)

US dollar:

During China's Qingming Festival holiday, the US dollar index showed a pattern of rising first then falling. As of the overnight close, the US dollar index closed at 99.99, down 0.19%. The closely watched employment report released by the US Bureau of Labor Statistics on Friday showed that non-farm payrolls increased by 178,000 last month, far exceeding market expectations of 60,000, while February data was revised down to a decrease of 133,000. The March unemployment rate was 4.3%, also below market expectations. After the non-farm payrolls data was released, the US dollar surged briefly. "Fed whisperer" Nick Timiraos wrote that March added 178,000 jobs, reversing the sharp decline in February. The unemployment rate also fell to 4.3%. But some details were less optimistic — wage growth for ordinary workers slowed to the lowest YoY growth rate in the five years of post-pandemic recovery. Averaging these two volatile months provides a clearer picture of the underlying trend: a monthly average of only 22,500 new jobs. Two years ago, adding 22,500 jobs per month would have been enough to trigger alarm; now, such a level may still be considered acceptable. US Fed officials are still trying to explain this shift. San Francisco Fed President Daly wrote on Friday: "It is not easy to help the public understand that an economy with zero job growth is still in line with full employment." This situation is particularly fragile as new supply shocks hit again. If the Iran war continues, high fuel costs or commodity shortages squeezing businesses and consumers, the labour market will lack a buffer to absorb the shock. Meanwhile, as inflation concerns may undermine the certainty of interest rate cuts, the US Fed's policy space is also more limited. (Jin10 Data APP)

As the Iran conflict pushed up energy prices while the job market remained sluggish, US Fed officials Hammack and Goolsbee both considered inflation a more serious problem than employment, suggesting they favour tighter rather than looser monetary policy. In an interview, both were asked to use colours to assess the economic situation, from "hair on fire" red to "all clear" green. Goolsbee said of the inflation outlook: "Things are not looking great." "I was optimistic that we were going to get back on track to 2% inflation, but boy, things have taken a turn for the worse recently." Hammack was also concerned about inflation, noting it had been above target for five consecutive years and had been "basically sideways" for the past two years. "It's definitely a brighter, more vivid orange now." On employment, Hammack said she was optimistic about the outlook, perhaps yellow-green. Goolsbee rated the labour market as "yellow." (Jin10 Data APP)

Economists said the sudden rise in gasoline prices felt by US consumers would be fully reflected in key inflation data to be released this week. US March CPI is expected to rise 1% MoM, which would be the largest single-month increase since 2022; core CPI is likely to rise 0.3% MoM. The Iran war previously drove US gas station prices up by about $1 per gallon. The day before CPI data is released, the US Fed's favoured inflation gauge will provide information on pre-war price pressures. Economists expect the core PCE price index may have risen 0.4% for the third consecutive month in February, suggesting that even before the conflict broke out, the process of inflation pulling back to milder levels had already stalled. Combined with signs of stabilization in the US labour market, stubborn price pressures, and new inflation risks from the Middle East war, this helps explain why the US Fed may find it difficult to cut interest rates this year. (Jin10 Data APP)

According to CME "FedWatch": the probability of the US Fed raising rates by 25 basis points in April was 1.6%, with a 98.4% probability of holding rates unchanged. The probability of a cumulative 25 basis point interest rate cut by June was 4.1%, with a 94.4% probability of holding rates unchanged, and a 1.5% probability of a cumulative 25 basis point rate hike. (Jin10 Data APP)

Other currencies:

According to foreign media reports, ECB Governing Council member and Dutch central bank governor Knot said in a podcast aired on April 4 that the ECB will next discuss the options of raising rates and holding rates unchanged. He believed this would be the focus of discussion at the ECB's April 30 rate decision. Although new data will be available by then, it will be limited. He added: "Like the US Fed, we are currently uncertain about how the rate path will develop. But in any case, we will ultimately make decisions based on the data available at the time." (Jin10 Data APP)

Moody's Analytics noted in a report that the Reserve Bank of New Zealand is expected to keep its benchmark rate unchanged at 2.25% this week, as the bank weighs inflation concerns and the impact of surging energy prices on the economy. The report stated that the central bank's monetary policy committee is likely to release a signal of patience and emphasize that short-term inflation pressures can be temporarily overlooked as the economy gradually stabilizes. (Jin10 Data APP)

Data:

This week on the China side, data to be released includes China's March CPI YoY, China's March foreign exchange reserves, China's March PPI YoY, and China's March M2 money supply YoY; on the US side, data to be released includes US March ISM Non-Manufacturing PMI, US March Global Supply Chain Pressure Index, US February durable goods orders MoM, US March Global Supply Chain Pressure Index, US March New York Fed 1-year inflation expectations, US 10-year Treasury auction yield as of April 8, US 10-year Treasury auction bid-to-cover ratio as of April 8, US March unadjusted CPI YoY, US March seasonally adjusted CPI MoM, US initial jobless claims for the week ending April 4, US February core PCE price index YoY, US February personal spending MoM, US Q4 real GDP annualized QoQ final, US Q4 real personal consumption expenditure QoQ final, US Q4 core PCE price index annualized QoQ final, US February core PCE price index MoM, US February core PCE price index MoM, US March seasonally adjusted core CPI MoM, US March unadjusted core CPI YoY, US April 1-year inflation expectations preliminary, US April University of Michigan consumer sentiment index preliminary, and US February factory orders MoM; on the Germany side, data to be released includes Germany's March services PMI final, Germany's February seasonally adjusted industrial output MoM, Germany's February seasonally adjusted trade balance, and Germany's March CPI MoM final; on the Eurozone side, data to be released includes Eurozone March services PMI final, Eurozone April Sentix investor confidence index, Eurozone February PPI MoM, and Eurozone February retail sales MoM; UK March services PMI final, UK March Halifax seasonally adjusted house price index MoM, Japan February trade balance, France February trade balance, Switzerland March seasonally adjusted unemployment rate, Switzerland March consumer confidence index, New Zealand RBNZ rate decision as of April 8, and Canada March employment change will also be released.

In addition, at 2:00 on April 9, the US Fed will release its monetary policy meeting minutes. US President Trump will hold a press conference with the military in the Oval Office. 2027 FOMC voter and Chicago Fed President Goolsbee will speak on monetary policy. The RBNZ will announce its rate decision. RBNZ Governor Breman will hold a monetary policy press conference. Swiss National Bank Chairman Schlegel will deliver a speech. China's refined oil products will open a new round of price adjustment window. On April 8, the EIA will release its monthly Short-Term Energy Outlook report.

It should be noted that on April 6, the Shanghai, Shenzhen and Beijing Stock Exchanges, domestic futures exchanges, the Taiwan Stock Exchange, and the Hong Kong Stock Exchange were all closed for the Qingming Festival. The Hong Kong Stock Exchange was closed for one day, and southbound and northbound trading was suspended. On April 6, the London Stock Exchange, Deutsche Börse, the Australian Securities Exchange, Euronext Paris, the Madrid Stock Exchange, the New Zealand Stock Exchange, and the Milan Stock Exchange were all closed for one day due to Easter Monday. (Jin10 Data)

Crude oil:

On April 3, oil prices on both markets were closed for Good Friday. Markets opened normally on April 6. As of the overnight close, both oil prices rose, with WTI up 0.96% and Brent up 0.61%.

US President Trump threatened to strike Iran's energy facilities if the Strait of Hormuz is not reopened, pushing oil prices higher at the open. US crude rose 1.3% to $113 per barrel. "Tuesday will be power plant day and bridge day for Iran, all in one shot. Absolutely unprecedented!!! Open the Strait now." Trump posted on Sunday morning. A few hours later, he appeared to set a new deadline: "Tuesday, 8:00 PM Eastern Time!" Trump had issued a similar two-day ultimatum to Iran on March 21 but later extended the deadline to April 6. (CNN) (Jin10 Data APP)

According to foreign media reports, as the Iran conflict entered its sixth week, concerns over near-term crude oil supply intensified. Brent crude's prompt spread — the price spread between the two nearest contracts — surged above $10 per barrel, forming a bullish pattern. This spread was not only the largest since the Iran conflict began but also far exceeded the peak during the outbreak of the Russia-Ukraine conflict in 2022. Trump's frequently contradictory statements on the conflict unsettled investors. The US leader at times claimed the conflict was about to end, and at other times threatened to escalate attacks, including strikes on civilian infrastructure. Meanwhile, he also had a track record of setting deadlines that he ultimately failed to deliver on. (Jin10 Data APP)

As Iran's near-closure of the Strait of Hormuz restricted regional energy transport and uncertainty over the duration of the conflict rattled markets, Saudi Arabia raised the price of its crude oil primarily sold to Asia by $17/barrel MoM, with the premium over the Oman/Dubai average reaching a record high. Saudi Aramco set the official selling price of its Arab Light crude for May shipments to Asia at a premium of $19.50 per barrel over the Oman/Dubai average, up $17 per barrel MoM. (Jin10 Data APP)