US dollar posts biggest weekly decline in six weeks, metals generally rise, with LME copper and lead up over 1%, and New York gold up over 5% week-on-week [overnight market]

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SMM reported on May 24:

Metal Market:

Overnight, metals in both domestic and overseas markets generally rose, with only SHFE zinc, SHFE tin, and SHFE nickel in the domestic market falling. SHFE zinc dropped by 0.09%, SHFE tin by 0.1%, and SHFE nickel by 0.26%. The rest of the metals rose, with LME copper and LME lead increasing by over 1%, specifically, LME copper rose by 1.19% and LME lead by 1.22%. The remaining increases were all within 1%.

Most ferrous metals series declined, except for stainless steel, which rose by 0.27%. Iron ore fell by 0.76%, HRC by 0.91%. In the coking coal and coke sector, coking coal dropped by 1.59% and coke by 1.32%.

In the precious metals sector, as of the overnight close, COMEX gold rose by 1.9%, with a weekly gain of 5.35%, marking its best performance in six weeks. Investors sought refuge in gold amid renewed tariff threats from US President Trump and a weaker US dollar. COMEX silver rose by 1.27%. Domestically, SHFE gold rose by 1.27%, with a weekly gain of 3.76%. SHFE silver rose by 0.62%, with a weekly gain of 1.95%.

Independent metal analyst Tai Wong stated, "Trump has been very active in the past 24 hours. He threatened to impose a 50% tariff on the EU starting June 1, while also pressuring Apple and launching an offensive against Harvard University. This has sent the stock market into a slump but has been positive for the gold market."

Overnight closing prices as of 8:46 AM on May 24

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Macro Front

Domestic Aspects:

[PBOC and SAFE: Funds raised from overseas listings, share reductions, or transfers should, in principle, be repatriated to China]① The notice proposes that funds raised from overseas listings, share reductions, or transfers can be repatriated in foreign currency or RMB, and relevant funds can be remitted in and out using capital account settlement accounts. ② The use of raised funds within China and foreign exchange risk management for enterprises have become more flexible and convenient. Listed entities can independently choose foreign exchange risk management channels, conducting spot foreign exchange settlement and sales, as well as hedging transactions through banks or securities firms.

[MOFCOM: Online sales of digital products increased by 8.4% from January to April, with smart robots and smart home systems growing by 87.6% and 16%, respectively]The head of the Department of E-commerce at the Ministry of Commerce introduced the development of China's e-commerce sector from January to April 2025. Digital consumption growth accelerated, with online sales of digital products increasing by 8.4% according to MOFCOM big data monitoring. Among them, smart robots and smart home systems grew by 87.6% and 16%, respectively. Trade-in products have seen rapid growth, with online sales of 15 categories of home appliances and digital products increasing by 11.5%. Among them, three expanded categories of digital products, including mobile phones, grew by 18.5%. Service consumption has led the growth, driven by factors such as policy efforts, supply optimization, and holiday economy. The monitored online service consumption increased by 12.1%, with online entertainment and online tourism growing by 31.9% and 25.4%, respectively.

US dollar:

The overnight US dollar index fell by 0.84% to close at 99.1, touching an intraday low of 99.04, the lowest in nearly three weeks. The US dollar's weekly line fell by 1.84% this week, marking the largest weekly decline since April 11. Earlier, the US once again threatened to escalate trade conflicts, proposing to impose a 50% tariff on the EU starting from June 1, prompting investors to sell off the US dollar. This has once again raised concerns about the impact of tariffs on the world economy and global trade.

After Moody's downgraded the US debt rating last week, investors' attention has focused on the US's $36 trillion debt and the tax cut bill, which could increase the US debt by several trillion dollars. The bill narrowly passed in the Republican-controlled US House of Representatives and is now submitted to the Senate, where senators may engage in weeks of debate, keeping investor sentiment fragile in the short term.

Other currencies:

In afternoon trading, the US dollar fell by 1% against the safe-haven Japanese yen to 142.48 yen, after earlier hitting a two-week low. The US dollar fell by 2.2% against the yen this week, on track for its largest weekly decline since April 7. Meanwhile, the yen received a boost. Earlier, Japan announced that its core annual inflation rate in April hit the highest in more than two years, increasing the likelihood of another interest rate hike before the end of the year. This data highlights the dilemma faced by the Bank of Japan, which must address price pressures from rising food prices and economic headwinds from Trump's tariffs.

The euro rose by 0.8% against the US dollar to $1.1363. Earlier, the euro touched a two-week high against the US dollar and is on track for its largest weekly gain in six weeks.

The British pound rose by 0.9% against the US dollar to $1.3533, after earlier climbing to its highest in more than three years. This week, the pound rose by 1%, marking its largest weekly gain in five weeks.

Data:

Next week, in China, the year-on-year profit data for industrial enterprises above designated size in April (single month) will be released. In the US, data such as initial jobless claims for the week ending May 24, the preliminary monthly rate of durable goods orders in April, the Conference Board Consumer Confidence Index for May, the revised annualized quarterly rate of real GDP for Q1, the revised annualized quarterly rate of core PCE price index for Q1, the revised annualized quarterly rate of consumer spending for Q1, the revised seasonally adjusted quarterly rate of the implicit GDP deflator for Q1, the monthly rate of the seasonally adjusted pending home sales index for April, the monthly rate of personal spending for April, the annual rate of the PCE price index for April, the annual rate of the core PCE price index for April, the preliminary monthly rate of wholesale inventories for April, the final value of the University of Michigan Consumer Sentiment Index for May, and the Chicago PMI for May will be released. In the Eurozone, data such as the final value of the consumer confidence index for May, the industrial and economic sentiment indices for May, and the annual rate of seasonally adjusted M3 money supply for April will be released. In Germany, data such as the Gfk consumer confidence index for June, the seasonally adjusted unemployment rate for May, the change in the seasonally adjusted number of unemployed persons for May, the annual rate of actual retail sales for April, the monthly rate of actual retail sales for April, and the preliminary annual rate of CPI for May will be released. In Canada, data such as the annualized quarterly rate of GDP for Q1, the seasonally adjusted quarterly rate of GDP for Q1, and the annual rate of seasonally adjusted GDP for March will be released. In addition, the CBI retail sales balance for May in the UK, the ANZ consumer confidence index for the week ending May 25 in Australia, the official cash rate decision for May 28 in New Zealand, the final value of the annual GDP rate for Q1 in France, the official reserve assets for April in Switzerland, the annual rate of Tokyo CPI for May in Japan, and the unemployment rate for April in Japan will all be released.

Additionally, the US Fed released the minutes of its May monetary policy meeting. Fed Chairman Powell will deliver a commencement speech at Princeton University's graduation ceremony. European Central Bank President Lagarde will speak at the Hertie School in Berlin. FOMC permanent voter and New York Fed President Williams will participate in a panel discussion at the Bank of Japan Institute for Monetary and Economic Studies conference. The Reserve Bank of New Zealand will announce its interest rate decision and monetary policy statement, and Reserve Bank of New Zealand Governor Orr will hold a monetary policy press conference.

On May 30, the Taiwan Stock Exchange in China was closed for the day due to the Dragon Boat Festival holiday. The Shanghai Gold Exchange, SHFE, Zhengzhou Commodity Exchange, and DCE did not have night session trading on the eve of the Dragon Boat Festival.

Crude Oil:

As of the overnight close, oil prices in both markets rose together, each gaining 0.92%. International oil prices increased as US buyers covered positions ahead of the three-day Memorial Day long weekend, while concerns about Iran's supply outlook also lingered.

The Memorial Day weekend marks the start of the US summer driving season, which is also the period of highest demand for automotive fuels. Next Monday (May 26) is Memorial Day in the US, and US financial markets will be closed. According to Xinhua News Agency, the US and Iran held their fifth round of indirect talks in Rome, the capital of Italy, on the 23rd. The Omani side, which chaired the talks, said that some progress had been made, but no decisive results had been achieved. Flynn said that if the talks failed to reach an agreement, traders were concerned that crude oil supplies might be affected.

OPEC, which consists of the Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies, will hold a meeting next week and is expected to increase production by another 411,000 barrels per day in July. Media reports this month indicated that the group might lift the remaining portion of its voluntary production cut plan of 2.2 million barrels per day by the end of October, after having already raised its daily production targets for April, May, and June by about 1 million barrels.

US energy services company Baker Hughes said in its closely watched report on Friday that the number of oil and natural gas rigs operated by US energy companies fell for the fourth consecutive week this week to the lowest level since November 2021. (Comprehensive report from Wenhua)