US non-farm payrolls better than expected, base metals show mixed performance, SHFE nickel rises nearly 1%, and ferrous metals series all rise [overnight market]

SMM July 4 News:

Metals Market:

Overnight domestic base metals showed mixed performance, with SHFE copper down 0.27%, SHFE nickel up 0.86%, SHFE lead up 0.26%, SHFE aluminum down 0.17%, SHFE zinc down 0.02%, and SHFE tin up 0.04%. Additionally, both the most-traded alumina futures and the main continuous aluminum futures dropped slightly, with declines below 0.1%.

Overnight ferrous metals series all rose, with iron ore up 1.44%, stainless steel up 0.71%, rebar up 0.65%, and HRC up 0.78%. For coking coal and coke: coking coal rose 0.88%, and coke rose 0.14%.

Overnight overseas base metals showed mixed performance, with LME copper down 0.61%, LME aluminum down 0.55%, LME lead up 0.17%, LME zinc down 0.71%, LME tin up 0.27%, and LME nickel up 0.35%.

Overnight precious metals: COMEX gold fell 0.71%, while COMEX silver rose 0.85%. SHFE gold dropped 0.4%, and SHFE silver rose 0.67%.

As of 7:06 on July 4, overnight closing prices

》Click to view SMM Futures Data Dashboard

Macro Front

Domestic Updates:

[Ministry of Commerce: Strengthen Guidance on Used Car Exports to Promote Healthy Development] The Ministry of Commerce held a regular press conference on the afternoon of July 3. Spokesperson He Yongqian stated that automobiles are "big-ticket durable" consumer goods, and encouraging the used car market is a common practice globally. In February 2024, the Ministry of Commerce jointly formulated and announced requirements/procedures for used car exports, officially launching the business nationwide. Over the past year, local authorities have implemented these measures, ensuring quality/safety and facilitating used car export work to meet overseas consumer car purchase demands. Next, we will continue collaborating with relevant departments to strengthen guidance on used car exports and promote their healthy development.

[China Passenger Car Association: National Passenger Vehicle Retail Sales Up 15% YoY and 5% MoM from June 1-30] Data from the China Passenger Car Association shows: From June 1-30, nationwide passenger vehicle retail sales reached 2.032 million units, up 15% YoY and 5% MoM, with cumulative sales of 10.849 million units year-to-date (+10% YoY). New energy vehicle retail sales hit 1.071 million units during the same period, up 25% YoY and 4% MoM, representing a 52.7% market penetration rate. Cumulative new energy vehicle retail sales reached 5.429 million units year-to-date (+32% YoY).

US dollar:

The overnight US dollar index rose by 0.35% to close at 97.12. The US dollar strengthened after the US Bureau of Labor Statistics announced that non-farm payrolls increased by 147,000 last month. Data released by the US Department of Labor on Thursday showed that non-farm payrolls increased by 147,000 in June, with an unemployment rate of 4.1%, both exceeding market expectations. Economists had previously forecast an increase of 110,000 jobs and an unemployment rate of 4.3%. However, nearly half of the new non-farm payrolls came from the government sector, while employment growth in the private sector slowed significantly. Industries such as manufacturing and retail are struggling to cope with the US's substantial tariff increases on imported products. As better-than-expected US employment data reinforced expectations that the US Fed is unlikely to cut interest rates ahead of schedule, the market currently expects the US Fed to start cutting interest rates in October and reduce them by 51 basis points before the end of the year, down from expectations of around 66 basis points before the report's release.

In addition, according to a report from the CCTV News app, on the afternoon of July 3 local time, the US House of Representatives conducted a final vote on President Trump's massive tax cut and spending bill, also known as the "Big and Beautiful" bill. The final vote showed 218 votes in favor and 214 against, allowing the bill to pass the House. The bill will now be sent to the White House for formal enactment after being signed by US President Trump.

Other currencies:

The eurozone's composite PMI for June was revised up to 50.6, hitting a three-month high. (1) The expansion rate of business activities in the eurozone in June exceeded expectations, with synchronized recoveries in manufacturing and services driving sustained economic recovery. (2) The final HCOB composite PMI for the eurozone in June rose to 50.6 from 50.2 in May, higher than the initial estimate of 50.2 and reaching a three-month peak. Ireland led the gains for the fourth consecutive month, followed by Spain, Italy, and Germany, while France became the only major economy to contract for ten consecutive months. (3) Output growth was mainly driven by the continuous digestion of backlogged workloads (which had been declining for 27 consecutive months), but new business continued to contract for the 13th consecutive month, and employment growth remained sluggish. (4) On the cost side, input price inflation remained at the six-month low set in May. The corporate confidence index continued to rebound, reaching its highest level since July 2024 in June, further improving from the 18-month low in April. (Huitong Finance)

Macro:

Data such as Switzerland's unadjusted unemployment rate for June, Switzerland's seasonally adjusted unemployment rate for June, the global leading indicator for the turning point of the industrial production cycle in June, Canada's monthly rate of leading indicators for June, and Canada's total reserve assets for June will be released today. Notably: The State Council's regular policy briefing: The effectiveness of the pilot program in the China (Shanghai) Pilot Free Trade Zone to fully align with international high-standard economic and trade rules, and the related situation of replication and promotion.

July 4th (Friday) coincides with the US Independence Day holiday, and trading hours in the financial markets have been adjusted accordingly.

The overseas market exchange holiday arrangements are as follows (all in Beijing time): 　　

》US July 4th Public Holiday: Overview of Overseas Market Exchange Holiday Arrangements

Crude Oil:

Both WTI and Brent crude oil futures fell overnight, with WTI down 0.4% and Brent down 0.38%. The market is concerned that US tariffs may slow energy demand, putting pressure on oil prices. The market expects OPEC to agree to increase production by 411,000 barrels per day at its policy meeting this weekend, which also adds pressure to oil prices.

The unexpected increase in US crude oil inventories also put pressure on the market. The US Energy Information Administration (EIA) announced on Wednesday that US domestic crude oil inventories rose by 3.8 million barrels last week to 419 million barrels. Analysts had previously expected inventories to fall by 1.8 million barrels.

A report released by energy services company Baker Hughes on Thursday showed that US energy companies reduced the number of active oil rigs by seven this week to 425, the lowest level since September 2021. (Wenhua Comprehensive)