"One Bank, One Bureau, One Commission" to Make Major Statements! US Dollar Falls, Base Metals Generally Decline, While New York Gold and Silver Surge [[Overnight Market Movements]]

SMM May 7 News:

Metal Market:

Overnight, domestic market base metals generally declined, with SHFE tin rising by 0.73%, SHFE copper by 0.84%, SHFE nickel falling by 0.21%, SHFE lead by 0.09%, SHFE aluminum by 0.55%, and SHFE zinc by 0.27%. In addition, alumina rose by 0.85%.

Overnight, the ferrous metals series mostly rose, with iron ore up by 1.13%, stainless steel by 0.55%, rebar by 0.52%, HRC by 0.84%. In terms of coking coal and coke: coking coal fell by 0.11%, and coke by 0.13%.

Overnight, LME base metals generally declined, with LME copper falling by 0.15%, LME zinc by 0.27%, LME tin rising by 0.02%, LME lead by 0.29%, and LME aluminum by 0.02%. LME nickel fell by 0.04%.

Overnight, precious metals: COMEX gold surged by 3.6%, and COMEX silver by 2.96%. Overnight, SHFE gold rose by 1.6%, and SHFE silver by 0.45%. Data released by the World Gold Council (WGC) showed that global central banks net purchased 17 mt of gold in March. Demand remained strong, with global central banks purchasing 35 mt of gold and selling 18 mt in March, of which Uzbekistan net sold 11 mt.

As of 8:09 on May 7, overnight closing prices

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Macro Front

Domestic:

[Announcement: The People's Bank of China, the China Securities Regulatory Commission, and other departments will make statements at 9 a.m. on the 7th to introduce the "package of financial policies to support market stability and expectations"] According to a May 6 announcement from the State Council Information Office, the office will hold a press conference at 9 a.m. on May 7, where officials from the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission will introduce the "package of financial policies to support market stability and expectations" and answer questions from reporters.

[Announcement: The Ministry of Commerce will hold its first regular press conference in May on May 8] The Ministry of Commerce is scheduled to hold a press conference at 3 p.m. on May 8, 2025 (Thursday), where a spokesperson will introduce the latest key work in the commerce sector and answer questions from reporters.

[Announcement: Public Consultation on the Establishment Plan for the MIIT E-bike Standardization Working Group] In response to industrial development and industry management needs, relevant entities have proposed an establishment plan for the e-bike standardization working group under the Ministry of Industry and Information Technology (MIIT). To further gather opinions from all sectors of society, the establishment plan is now open for public consultation until June 5, 2025.

US Dollar:

Overnight, the US dollar index fell by 0.56% to 99.24.Hopes for a US trade deal are fading, and the US dollar is in trouble. Data released by the US Department of Commerce on Tuesday showed that the US trade deficit reached a record high of $140.5 billion in March, as companies increased imports of goods ahead of tariff announcements, dragging the US gross domestic product (GDP) into negative growth for the first time in three years in Q1. Uncertainty over US tariffs has led to a deterioration in US consumer confidence data, with many companies withdrawing their financial forecasts. Speeches by Fed officials, including Fed Chairman Powell, suggest that the Fed will remain patient until the impact of tariffs is reflected in economic data before deciding whether and how to adjust monetary policy. The Fed began a two-day meeting on Tuesday, and the market widely expects the Fed to keep interest rates unchanged on Wednesday.

In other currency news:

The president of the Swiss National Bank stated that the main concerns of businesses are geopolitical uncertainty, weakening European demand, and the appreciation of the Swiss franc over the past two weeks. Switzerland is facing a triple hit from tariffs. Our responsibility is to stabilize prices in Switzerland, and we must use interest rates and exchange rates to ensure this. Swiss National Bank President Martin Schlegel said that the appreciation of the Swiss franc has been significant, and policymakers are ready to intervene in the foreign exchange market if necessary to maintain price stability. (Caijing)

The euro rose against the US dollar, mainly driven by the overall weakness of the US dollar. Since April, the euro has appreciated more than 5% against the US dollar, as investors question the dominance of the US dollar in the global financial system and turn to favour the euro as an alternative currency. The euro is also supported by expectations of increased German defense spending. The European Central Bank cut its deposit rate by 25 basis points to 2.25%, the lowest level since early 2023, and removed the term "restrictive" from its policy language, while warning that the economic outlook has deteriorated due to trade tensions. The market expects the European Central Bank to make three more 25-basis-point interest rate cuts before the end of the year. (Huitong Finance)

On the macro front:

Today, data such as Australia's April AIG Performance of Manufacturing Index, New Zealand's Q1 unemployment rate, New Zealand's Q1 labor force participation rate, China's April foreign exchange reserves, Russia's April SPGI Services PMI, France's March trade balance, the eurozone's March retail sales month-on-month rate, the eurozone's March retail sales year-on-year rate, and Canada's April leading indicators month-on-month rate will be released.

In crude oil news:

Both WTI and Brent crude oil futures rose sharply overnight, with WTI up 3.27% and Brent up 3.01%. This is due to signs of increased European demand, a decline in US production, and tensions in the Middle East.Additionally, buyers emerged in the market on the second day after oil prices fell to a four-year low, factors that supported oil prices.

Data released by the American Petroleum Institute (API) showed that for the week ending May 2, US crude oil inventories fell by 4.494 million barrels, gasoline inventories decreased by 1.974 million barrels, and distillate fuel oil inventories increased by 2.242 million barrels. Analysts surveyed earlier had expected, on average, a decline of 800,000 barrels in US crude oil inventories, a decrease of about 1.5 million barrels in gasoline inventories, and a reduction of about 1.3 million barrels in distillate fuel oil inventories for the previous week. The EIA will release official oil inventory data at 22:30 Beijing time on Wednesday.

The US Energy Information Administration (EIA) stated in its monthly Short-Term Energy Outlook (STEO) that US oil production in 2025 is expected to be 13.42 million barrels per day, down from the previous forecast of 13.51 million barrels per day. Production in 2026 is projected to be 13.49 million barrels per day, compared to the prior estimate of 13.56 million barrels per day. The EIA maintained its global oil production forecast for 2025 at 104.1 million barrels per day and expects production to reach 105.4 million barrels per day in 2026, up from the previous estimate of 105.3 million barrels per day (Webstock Inc.).