Gold, Silver, Copper All Fall, Metals Broadly Decline, LME Copper, Aluminum, Zinc, Tin Down Over 1%, NY Silver Drops Over 4%, Coking Coal and Coke Rise Over 2% [Overnight Market]

SMM, August 19:

In the metals market:

Overnight, base metals on the domestic market mostly fell. SHFE copper fell 0.89%. SHFE aluminum fell 0.75%. SHFE zinc fell 1.07%, SHFE tin fell 1.21%. SHFE nickel fell 0.25%. SHFE lead rose 0.47%. In addition, the most-traded alumina futures contract fell 0.07%, and the most-traded aluminum casting futures contract fell 0.46%.

Overnight, ferrous metals all rose. Stainless steel rose 0.25%, iron ore rose 1.63%, and rebar rose 0.7%. HRC rose 0.67%. For coking coal and coke: the most-traded coking coal contract rose 2.22%, and the most-traded coke contract rose 2.46%.

Overnight, on the overseas market, LME base metals broadly fell. LME copper fell 1.2%. LME aluminum fell 1.29%. LME lead rose 0.16%. LME zinc fell 1.68%. LME tin fell 1.12%. LME nickel rose 0.24%.

Overnight, in precious metals: COMEX gold fell 1.88%, and COMEX silver fell 4.24%. Overnight, the most-traded SHFE gold contract fell 0.95%, and the most-traded SHFE silver contract fell 2.95%.

As of 7:16 AM on August 19, overnight closing prices:

Macro front

China:

[State Council: Broaden the Scope of Housing Provident Fund Withdrawal and Use] Premier Li Qiang recently signed a State Council decree, announcing the Decision of the State Council on Amending the Regulations on the Management of Housing Provident Funds, which will take effect on September 20, 2026. The amendments include broadening the scope of withdrawal and use. For the withdrawal of housing provident funds to pay rent, the threshold that rent must exceed a prescribed percentage of household wage income is removed; new circumstances in which housing provident funds can be withdrawn are added, including for the renovation of owner-occupied housing, payment of property management fees for owner-occupied housing, and other housing consumption scenarios approved by the State Council. The investment and utilization channels for housing provident funds are appropriately broadened, and it is clarified that housing provident fund management centers may use housing provident funds to purchase policy-oriented financial bonds.

[Ministry of Commerce: 18 Measures Introduced to Further Stimulate the Vitality of the Lower-Tier Market] On the afternoon of August 18, the State Council Information Office held a press conference to introduce efforts to stimulate the vitality of the lower-tier market and boost consumption at the county level. A responsible official from the Ministry of Commerce stated that, regarding the optimization of the commercial environment in counties, the Opinions propose accelerating the renewal of existing commercial facilities, optimizing the layout of commercial outlets, improving supporting commercial services, and revitalizing idle resources and assets. The efficiency of urban-rural distribution networks will be improved, two-way distribution channels between urban and rural areas will be unblocked, and the coordinated development of online and offline channels will be promoted. In terms of enriching supply in county-level consumption, we will guide chain enterprises to accelerate their expansion into lower-tier markets, encourage local brands to uphold tradition while pursuing innovation, and develop new business formats in line with local conditions. We will expand the supply of high-quality, reasonably priced goods, accelerate the improvement of service formats such as elderly care and childcare, and promote the integrated development of commerce, agriculture, culture, tourism, and sports. (From the Wall Street CN APP)

[Shanghai: By 2030, Striving to Build Shanghai into a Core Node in the Global Logistics and Supply Chain Network, an International Logistics Hub, and a Global Supply Chain Management Center City] The General Office of the Shanghai Municipal People's Government issued the "Shanghai Modern Logistics Development 15th Five-Year Plan." By 2030, a modern logistics system characterized by internal and external connectivity, convenience and efficiency, value-added empowerment, and smart and green development will be fully established. Efforts will focus on improving the logistics network composed of "gateway hubs—regional bases—community-level nodes." The logistics industry structure will be continuously optimized, logistics operation quality and efficiency will be further improved, and the international competitiveness, industrial support capacity, and livelihood security capability of logistics services will be significantly enhanced. The goal is to build Shanghai into a core node in the global logistics and supply chain network, an international logistics hub, and a global supply chain management center city. (From the Wall Street CN APP)

US Dollar:

The overnight US dollar index rose 0.07% to 99.65. Bond traders have adjusted their strategies once again. Following a series of data suggesting that a rate hike by the US Fed for the rest of the year is nearly impossible, options market bets are attempting to hedge against the risk of the Fed pivoting to an interest rate cut in 2027. This dovish bet contradicts recent movements in the US Treasury market: long-term bond yields have risen to multi-year highs, as a Fed on hold would keep inflation persistently above target for longer. Options traders closely tied to the Fed's policy path, however, are turning their attention to signs of US economic weakness, which they believe could trigger a market reversal. This trend first emerged when data released last week showed that inflation and consumer demand slowed down in July, cooling market expectations for a rate hike at the Fed's September meeting. Options market participants subsequently began adjusting their positions, reducing the magnitude of rate hikes priced into the swap market for the coming months. Some options are even considering hedging the risk of a rate cut that could occur by the middle of next year. "Concerns about rate hikes have diminished," said Jeff Schul, head of rates at Constitution Capital, noting that positions betting on that outcome are being unwound.

According to CME "FedWatch": The probability that the Fed will keep interest rates unchanged through September is 65%, and the probability of a cumulative 25-basis-point rate hike is 35%. The probability that the Fed will keep interest rates unchanged through October is 51.4%, the probability of a cumulative 25-basis-point rate hike is 41.3%, and the probability of a cumulative 50-basis-point rate hike is 7.4%.

"Fed mouthpiece" Nick Timiraos: Executives surveyed by the Cleveland Fed expect CPI inflation to be 3.3% over the next year, slightly down from 3.7% in Q2. They anticipate no significant changes in wage growth (2.8% over the next year vs. 2.9% in last year's survey) or employment levels. R&D spending growth is expected to slow down, projected at 2.0% over the next year, down from 3.1% in last year's survey.

Bank of America's August global fund manager survey showed that a majority expect Fed Chairman Warsh to take a neutral stance at the Fed's annual Jackson Hole conference later this month. Among respondents, 31% expect him to deliver "hawkish" remarks, while only 7% expect "dovish" remarks. (Jin10)

On the macro front:

Today will see the release of the UK July CPI m/m, UK July RPI m/m, eurozone June seasonally adjusted current account, eurozone July final CPI y/y, eurozone July final CPI m/m, and other data. Also, watch for: ECB President Christine Lagarde attending the "Global Economic Outlook" discussion at the World Economic Forum International Business Council (IBC) meeting; Kuaishou holds its earnings call.

On the crude oil front:

Overnight, both crude oil futures extended gains for a second day, with WTI up 0.81% and Brent up 0.51%.

Crude oil prices remained calm, but diesel saw strong undercurrents. The US-Iran ceasefire agreement technically expired on Monday. Trump said the US is not currently negotiating with Iran but insisted that the Strait of Hormuz is open and operating normally. The US Strategic Petroleum Reserve fell to 293.4 million barrels, the lowest since 1982. The US Strategic Petroleum Reserve fell to 293.4 million barrels, the lowest since 1982. Ukrainian drone strikes pushed Russian crude oil exports to a four-week low, with supply disruptions in both the Middle East and the Black Sea; refiners became the biggest winners. Jet fuel and diesel prices per barrel equivalent are both near 2022 crisis levels, while WTI is only $84.92, making crack spreads extremely wide. (Wall Street See)