US dollar falls, crude oil jumps over 5%, metals show mixed performance, coking coal leads losses with a drop of over 1% [overnight market]

SMM, June 12:

Metal Market:

As of the overnight close, domestic metals showed mixed performance, with only SHFE aluminum and SHFE lead rising together. SHFE aluminum increased by 0.4%, SHFE lead by 0.09%, while SHFE nickel fell by 0.95% and SHFE copper by 0.77%. The fluctuations in the decline of other metals were relatively small. The main alumina contract fell by 0.21%, while the main aluminum casting contract rose by 0.21%.

Most ferrous metals series declined, with stainless steel being the only one to rise, up by 0.48%. Rebar and HRC both fell by more than 0.4%, with rebar down by 0.47% and HRC by 0.48%. In the coking coal and coke sector, coking coal fell by 1.71% and coke by 0.85%.

Overseas base metals showed mixed performance, with LME copper, LME zinc, and LME nickel rising together. LME zinc increased by 0.23%, LME copper by 0.19%, and LME nickel by 0.12%. The fluctuations in the decline of other metals were relatively small.

In the overnight precious metals market, COMEX gold rose by 0.98%, while COMEX silver fell by 0.77%. Domestically, SHFE gold rose by 0.42%, and SHFE silver fell by 0.75%.

As of 8:16 a.m. on June 12, the overnight close from last Friday's session

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Macro Front

Domestic:

From June 9 to 10 local time, He Lifeng, the Chinese head of the China-US economic and trade consultation mechanism and Vice Premier of the State Council, held the first meeting of the China-US economic and trade consultation mechanism with Beth Van Scoyoc, the US head of the mechanism, US Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo, and Trade Representative Katherine Tai in London, UK. Both sides engaged in candid and in-depth dialogue, exchanging in-depth views on economic and trade issues of mutual concern. They reached a consensus in principle on measures to implement the important agreement reached during the phone call between the two heads of state on June 5 and to consolidate the outcomes of the Geneva economic and trade talks, making new progress in addressing each other's economic and trade concerns.

Li Chenggang, China's International Trade Representative and Vice Minister of Commerce, said in London, UK, on the evening of June 10 that over the past two days, the Chinese and US teams had in-depth exchanges and reached a framework for implementing the consensus reached during the phone call between the two heads of state on June 5 and the Geneva talks.

At a regular press conference yesterday, Foreign Ministry spokesperson Lin Jian introduced that the Ministerial Meeting of Coordinators for the Implementation of the Outcomes of the Forum on China-Africa Cooperation was held in Changsha, Hunan Province. President Xi Jinping sent a congratulatory letter to the meeting, announcing that China would implement zero-tariff measures for 100% of tariff lines for products from 53 African countries with diplomatic relations with China.

US Dollar:

The US dollar fell by 0.42% overnight to close at 98.63. This was because data showed that inflation in the world's largest economy last month was lower than expected, suggesting that the US Fed might resume interest rate cuts sooner rather than later. The US Department of Labor announced that after rising 0.2% in April, the Consumer Price Index (CPI) increased by another 0.1% in May. Economists had previously forecast a 0.2% rise in CPI. Core price pressures in May were also relatively small, with core CPI rising only 0.1% after a 0.2% increase in April. However, the overall CPI rose to 2.4% YoY, up from 2.3% YoY in April.

According to the CME FedWatch Tool, traders currently see a 68% probability of the US Fed cutting interest rates in September. Currently, the market's focus is on the US Producer Price Index (PPI) data to be released on Thursday, ahead of the Fed's June 17-18 meeting. (Wenhua Comprehensive)

In other currency news:

In the afternoon in New York, the US dollar fell 0.2% against the Japanese yen to 144.58 yen; the euro rose 0.5% against the US dollar to $1.1484, after briefly paring gains earlier.

The Swiss franc fell 0.3% against the US dollar to 0.8205 francs. The British pound rose against the generally weak US dollar, gaining 0.3% to $1.3542.

In terms of data:

Today, the US initial jobless claims for the week ending June 7, continuing jobless claims for the week ending May 31, US PPI YoY for May, US core PPI YoY for May, Japan's BSI Large Manufacturing Confidence Index for Q2, UK GDP MoM for April, UK industrial production MoM for April, UK industrial production YoY for April, UK seasonally adjusted goods trade balance for April, and UK seasonally adjusted trade balance for April, among other data, will be released.

In addition, at 12:00 on June 12, US President Trump raised tariffs on imported steel from 25% to 50%. He Lifeng visited the UK from June 8 to 13 and held the first meeting of the China-US Economic and Trade Consultation Mechanism.

In crude oil news:

Overnight, oil prices in both markets surged, with US crude rising 5.11% and Brent crude rising 5.85%, reaching their highest levels in more than two months amid escalating tensions in the Middle East.

According to CCTV News, local time on June 11, Pentagon officials said that US military families in Bahrain could temporarily leave the country. Separately, sources said that US Defense Secretary Hegseth had authorized "voluntary departures" for US military families stationed across the Middle East. Traders were surprised by this and rushed to buy crude oil futures. Iraq is the second-largest crude oil producer in the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia. Phil Flynn, an analyst at Price Futures Group, said, "The market did not expect such a significant regional risk."

The ongoing tensions with Iran mean that Iran's oil supplies may continue to be restricted by sanctions. The optimistic trade outlook between the US and China has also contributed to the sustained rise in oil prices, potentially stimulating energy demand in the world's two largest economies.

CCTV News reported that from June 9 to 10 local time, He Lifeng, the Chinese lead negotiator for economic and trade affairs and Vice Premier of the State Council, held the first meeting of the China-US Economic and Trade Consultation Mechanism in London, UK, with Beth Van Scoyoc, the US lead negotiator and Secretary of the Treasury, Gina Raimondo, Secretary of Commerce, and Katherine Tai, US Trade Representative. Both sides engaged in candid and in-depth dialogue, exchanging views on economic and trade issues of mutual concern, reaching a consensus in principle on measures to implement the important agreements reached during the phone call between the heads of state of the two countries on June 5 and to consolidate the outcomes of the Geneva economic and trade talks, and making new progress in addressing economic and trade concerns of both sides.

The inventory report released by the US Energy Information Administration (EIA) showed that US crude oil inventories declined last week due to increased refining activity, pushing up gasoline and distillate inventories. For the week ending June 6, US commercial crude oil inventories fell by 3.6 million barrels to 432.4 million barrels, compared to market expectations of a 2 million barrel decline. The EIA stated that US gasoline inventories rose by 1.5 million barrels to 229.8 million barrels, compared to market expectations of a 900,000 barrel increase. US distillate inventories, including diesel and heating oil, increased by 1.2 million barrels to 108.9 million barrels, compared to market expectations of an 800,000 barrel increase. (Comprehensive report from Wenhua)