US dollar falls for five consecutive days; metals rise nearly across the board. LME tin rises over 2%; SHFE tin, SHFE nickel, LME zinc, and LME nickel rise over 1% [Overnight Market]

SMM June 26 Report:

Metal Market:

Overnight, metals in both domestic and overseas markets nearly all rose, with only LME aluminum falling by 0.48% and the rest rising. LME tin led the gains with a 2.54% increase, while LME zinc, LME nickel, SHFE tin, and SHFE nickel all rose by over 1%. Specifically, LME zinc rose by 1.06%, LME nickel by 1.04%, SHFE tin by 1.8%, and SHFE nickel by 1.19%. The remaining metals all rose by less than 1%. The main alumina contract rose by 1.07%, and the main aluminum casting contract rose by 0.36%.

The ferrous metals series showed mixed performance, with stainless steel rising by 1.36% and recording a three-day winning streak. Iron ore rose by 0.07%, while rebar and HRC both fell. In the coking coal and coke sector, coking coal rose by 2.02%, and coke rose by 1.17%.

In precious metals, COMEX gold rose by 0.37%, and COMEX silver rose by 1.34%. Domestically, SHFE gold rose by 0.52%, and SHFE silver rose by 1.29%.

Overnight closing prices as of 6:44 AM on June 26

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Macro Front

Domestic:

On the morning of June 25, Premier Li Qiang of the State Council attended and delivered a speech at the opening ceremony of the 2025 Summer Davos Forum in Tianjin. Li Qiang stated that China will continue to actively integrate into the global market, contributing what the Chinese economy can to what the world economy needs. Over the years, the Chinese economy has been an important engine for global economic growth, not only due to its own stability and high growth potential but also due to its openness and interconnectedness with the world economy. The sustained and steady growth of the Chinese economy will provide strong support for accelerating the global economic recovery. The continuous expansion and improvement of the Chinese market will create incremental space for reversing the downturn in international trade and economic cooperation. China's continuous breakthroughs and advancements in innovation will inject new vitality into global development to overcome insufficient momentum.

He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, pointed out during a survey in Hebei from June 23 to 24 that it is necessary to deeply study and implement the important instructions of General Secretary Xi Jinping, conscientiously implement the decisions and deployments of the CPC Central Committee and the State Council, accelerate the construction of a unified national market, actively expand domestic demand to boost consumption, accelerate the construction of a new model for real estate development, develop new quality productive forces according to local conditions, and better promote high-quality economic development.

US Dollar:

Overnight, the US dollar index fell by 0.29% to 97.69, recording a five-day losing streak. The easing of geopolitical tensions and increasing market expectations that the US Fed will cut interest rates more this year have led to the weakening of the US dollar. Fed Chairman Powell reiterated on the second day of his testimony before the US Congress on Wednesday that he expects the Trump administration's tariffs to push up inflation and that the Fed should maintain interest rates unchanged. Powell said on Tuesday that if it weren't for tariffs, the US Fed might continue to cut interest rates. Both Fed Vice Chair Bowman and Governor Waller recently indicated that the US Fed should cut interest rates as soon as possible, increasing the likelihood of more rate cuts. Federal funds futures traders expect a 62 basis point rate cut by the end of the year, up from around 46 basis points expected before Waller's remarks last Friday. Traders have fully priced in the expectation of the first rate cut in September. Investors have also shifted their attention back to trade negotiations aimed at avoiding reciprocal tariffs, with the July 9 deadline set by the Trump administration approaching. The CME Group's FedWatch tool shows that the market predicts a 22% chance of the first rate cut at the July meeting and a 90% chance of a rate cut in September. (Wenhua Comprehensive)

In other currencies:

The euro rose 0.43% against the US dollar, touching its highest level since October 2021 at $1.1658. Expectations of increased fiscal spending in the eurozone boosted the euro. The British pound rose 0.33% against the US dollar, touching its highest level since January 2022 at $1.3659.

The Swiss franc was trading near a 10-and-a-half-year high of 0.804 francs per US dollar touched on Tuesday in late New York trading.

The US dollar rose 0.18% against the Japanese yen to 145.17 yen. The summary of opinions from the Bank of Japan's June policy meeting released on Wednesday showed that some BOJ policymakers called for temporarily keeping interest rates stable due to uncertainties about the impact of US tariffs on the Japanese economy. Naoki Tamura, a hawkish member of the BOJ's Policy Board, said that even if uncertainties about US tariffs persist, the BOJ may need to "decisively" raise interest rates to address inflation risks. This highlights the BOJ's concern about growing price pressures.

In macroeconomic news:

Today, the final values of the annualized quarterly rate of real GDP for Q1 in the US, the final values of the quarterly rate of the GDP price index for Q1 in the US, the final values of the annualized quarterly rate of the core PCE price index for Q1 in the US, the final values of the annualized quarterly rate of consumer spending for Q1 in the US, the final values of the quarterly rate of the implicit GDP deflator - seasonally adjusted for Q1 in the US, the preliminary value of the monthly rate of durable goods orders for May in the US, the number of initial jobless claims for the week ending June 21 in the US, the preliminary value of the monthly rate of wholesale inventories for May in the US, the monthly rate of the seasonally adjusted pending home sales index for May in the US, the CBI retail sales balance for June in the UK, and the Gfk consumer confidence index for July in Germany, among other data, will be released.

In addition, Bank of England Governor Bailey will deliver a keynote speech at the British Chambers of Commerce Global Annual Conference.

In crude oil:

Oil prices in both markets rebounded overnight, with US oil rising 0.89% and Brent oil rising 0.42%. It rebounded from the sharp decline earlier this week, as data indicated relatively strong demand in the US and investors assessed geopolitical stability. A report released by the US Energy Information Administration (EIA) on Wednesday showed that US crude oil, gasoline, and distillate inventories fell last week due to increased refining activity and demand. The EIA stated that US crude oil inventories decreased by 5.8 million barrels to 415.1 million barrels for the week ending June 20, exceeding analysts' expectations of a 797,000-barrel decline. The EIA said that crude oil inventories at the Cushing, Oklahoma, delivery hub fell by 464,000 barrels.

US gasoline inventories decreased by 2.1 million barrels to 227.9 million barrels, contrary to market expectations of a 400,000-barrel increase. US distillate inventories, which include diesel and heating oil, decreased by 4.1 million barrels to 105.3 million barrels, compared to market expectations of a 400,000-barrel increase.

Data released by the US Energy Information Administration (EIA) showed that US gasoline product supplied increased to 9.6 million barrels per day for the week ending June 20, reaching the highest level since December 2021. Product supplied, an indicator of demand measured by the EIA, increased by 389,000 barrels per day last week, marking the largest weekly increase since late June.

Markets are betting that the US Fed may cut US interest rates as early as September, which typically stimulates economic growth and oil demand. (Wenhua Comprehensive)