Crude oil falls, metals show mixed performance, LME tin and LME nickel drop over 1%, NYMEX gold falls nearly 2% [Overnight Market]

SMM, May 28:

Metal Market:

Overnight, metals in both domestic and overseas markets showed mixed performance. LME aluminum led the gains with a 0.79% increase, while SHFE aluminum rose by 0.6%. LME zinc increased by 0.28%, and SHFE copper rose by 0.14%. The remaining metals all declined, with LME tin and LME nickel falling together. LME tin dropped by 1.25%, and LME nickel fell by 1.37%. SHFE zinc temporarily closed flat at 22,410 yuan/mt. The fluctuations in the decline of other metals were relatively small. The main alumina futures contract closed at 3,013 yuan/mt.

Most ferrous metals series declined. Stainless steel fell by 0.86%, rebar by 0.57%, and HRC and iron ore both fell by more than 0.4%, with HRC dropping by 0.42% and iron ore by 0.43%. In the coking coal and coke sector, coking coal rose by 0.19%, while coke fell by 0.22%.

In the precious metals sector, as of the overnight close, COMEX gold fell by 1.98%, and COMEX silver dropped by 0.67%. Domestically, SHFE gold fell by 0.79%, and SHFE silver declined by 0.07%.

Overnight closing prices as of 8:14 a.m. on May 28

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Macro Front

Domestic Aspects:

[The Expert Advisory Group of the Anti-Monopoly and Anti-Unfair Competition Committee of the State Council convenes a meeting: Comprehensively addressing "cut-throat competition"] ① The meeting emphasized that the Expert Advisory Group should focus on new issues in fair competition governance, conduct forward-looking research, and provide support for building a unified national market and promoting high-quality development. ② The Expert Advisory Group should align with the committee's work plans, closely follow key tasks, take proactive responsibilities, and contribute wisdom to enhancing fair competition governance capabilities and maintaining market order.

US Dollar Aspects:

As of the overnight close, the US dollar index rose by 0.64% to 99.61%, mainly driven by improved US consumer confidence. Data showed that US consumer confidence in May was significantly better than economists' expectations, leading to further gains in the US dollar. Data released this week will include the April Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, to be announced on Friday.

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, called on Tuesday for keeping interest rates unchanged until it becomes clearer how tariff increases will affect inflation, and warned against "ignoring" the impact of such supply-side price shocks.

Investors are also monitoring a spending and tax bill passed by the US Congress, which is expected to increase US government debt by several trillion dollars.

Other Currencies:

The euro fell by 0.46% to 1.1335 US dollars. Meanwhile, data showed that France's inflation rate fell to its lowest level since December 2020 in May, weighing on the euro. US President Trump abandoned his threat to impose 50% tariffs on EU imports starting next month on Sunday, boosting risk appetite on Tuesday. European Central Bank President Christine Lagarde said on Monday that if member governments could strengthen the eurozone's financial and security architecture, the euro could become a viable substitute for the US dollar.

The US dollar rose 0.77% against the Swiss franc to 0.827 Swiss francs. Swiss National Bank President Martin Schlegel said on Tuesday that Swiss inflation could enter negative territory in the coming months, but this would not necessarily trigger a response from the SNB.

Data:

Today, data such as the eurozone's 1-year and 3-year ECB CPI expectations for April, Germany's seasonally adjusted unemployment rate and change in seasonally adjusted unemployment for May, Australia's ABS CPI annual rate (seasonally adjusted) for April, New Zealand's official cash rate decision for May 28, France's final Q1 GDP annual rate, and Switzerland's Credit Suisse/CFA Economic Expectations Index for May will be released.

In addition, FOMC permanent voter and New York Fed President John Williams will participate in a panel discussion at the Bank of Japan's Institute for Monetary and Economic Studies conference. The Reserve Bank of New Zealand will announce its interest rate decision and monetary policy statement, and RBNZ Governor Adrian Orr will hold a monetary policy press conference.

Crude oil:

Oil prices in both markets fell overnight, with US crude down 0.75% and Brent crude down 0.59%. Investors are focused on US-Iran negotiations and expect OPEC+ to decide to increase production at its meeting this week, which could lead to a supply surplus. OPEC+, comprising the Organization of the Petroleum Exporting Countries and its allies, is not expected to change its policy at its meeting later this week. However, three OPEC+ delegates said that OPEC+ may agree to further increase production in July this week, the latest stage in a plan to meet growing demand and increase market share. Meanwhile, Iranian and US delegations concluded their fifth round of talks in Rome last week.

Dennis Kissler, vice president of BOK Financial, said, "OPEC is likely to agree on further production increases. If that happens, it will be a major bearish factor for crude oil in the near term, especially if Iran increases production under a potential (US) agreement." If nuclear negotiations between the US and Iran fail, it could mean that Iran will continue to face sanctions, which would limit Iran's oil supply, while any resolution could increase Iran's market supply.

Additionally, still in terms of supply, preliminary surveys on Tuesday showed that US crude oil inventories likely increased by about 500,000 barrels last week. The American Petroleum Institute (API) will release its weekly crude oil inventory report at 4:30 a.m. Beijing time on Thursday, while the US Energy Information Administration (EIA) will release its weekly crude oil inventory report at midnight Beijing time on Friday. Both reports were postponed due to the US Memorial Day holiday on Monday. (Culture Comprehensive)