Crude Oil Rose Over 2%, Metals Show Mixed Performance, LME Zinc Up Over 1%, LME Aluminum Down Over 1%, COMEX and SHFE Silver Up Over 2% [Overnight Market]

SMM May 8 News:

Metals market:

Overnight base metals showed mixed performance across domestic and overseas markets. LME zinc led the gains with a 1.1% rise, SHFE tin rose 0.76%, LME aluminum fell 1.34%, LME tin fell 1.25%, and the remaining metals posted % changes within 1%. The alumina most-traded contract fell 0.03%, while the foundry aluminum most-traded contract rose 0.02%.

Overnight ferrous metals: stainless steel fell 0.97% to lead the declines, iron ore temporarily settled flat at 815 yuan/mt, and rebar rose 0.4%. Coking coal and coke showed mixed performance, with coking coal up 0.46% and coke down 0.11%.

Overnight precious metals: COMEX gold rose 0.04% and COMEX silver rose 2.09%. In China, SHFE gold rose 0.12% and SHFE silver rose 2.49%. PBOC: China's gold reserves stood at 74.64 million ounces (approximately 2,321.56 mt) at the end of April, up 260,000 ounces (approximately 8.09 mt) MoM from 74.38 million ounces (approximately 2,313.48 mt) at the end of March, marking the 18th consecutive month of gold accumulation. (Jin10 Data APP)

As of 6:43 AM on May 8, overnight closing prices:

Macro Front

China:

[Domestic tourism during this year's Labour Day holiday reached 325 million trips, up 3.6% YoY] During the Labour Day holiday, domestic tourism reached 325 million trips nationwide, up 3.6% YoY; total domestic tourism spending was 185.492 billion yuan, up 2.9% YoY. (CCTV News) (Jin10 Data APP)

[MOFCOM spokesperson answered reporters' questions on the EU's ban on funding projects using Chinese inverters] According to media reports, EU officials stated that the EU will ban funding for projects using inverters from China and other "high-risk countries." When asked for China's comment, the MOFCOM spokesperson said China has noted the relevant reports. Without any actual evidence, the EU for the first time designated China as a so-called "high-risk country" and used this as a pretext to ban funding for projects using Chinese inverters. This constitutes stigmatization of China and imposes unfair and discriminatory treatment on Chinese products. China rejects and firmly opposes this. China urges the EU to immediately stop stigmatizing China by labeling it a "high-risk country" and to revoke the unfair and discriminatory practices against Chinese products. China will closely monitor and carefully assess the impact of EU policies on the interests of Chinese enterprises and China-EU industrial and supply chains, and will take measures to safeguard the legitimate rights and interests of Chinese enterprises. (MOFCOM) (Jin10 Data APP)

US dollar:

As of the overnight close, the US dollar index rose 0.27% to 98.28. New York Fed President Williams said on Thursday that demand for US Treasuries remained strong despite the government's massive borrowing. Williams said the US Fed was watching the government's extremely high borrowing levels "very closely." He noted that while it may be surprising, demand for US Treasuries remained "enormous," and "the US is still seen as the strongest economy in the world" and an ideal safe haven for capital, "even with all the geopolitical issues and other factors, that hasn't changed." Williams also said the US economy had shown considerable resilience amid the energy shock triggered by the Middle East war. He said that given surging energy prices, "the biggest question" was how the situation would evolve, adding that regarding inflation that continued to stay high, the US Fed would "make sure" and commit to bringing inflation back down to the 2% target. (Jin10 Data APP)

San Francisco Fed President Daly downplayed the divergence in the US Fed's statement, suggesting she would not dissent like some of her colleagues. She said the wording of the statement was less important than actions, and the real signal from the meeting was the unanimous agreement on the decision. Last month, three officials objected to language hinting at future interest rate cuts, arguing that the energy shock and uncertainty from the Iran war made a signal that "rates could go up or down" more appropriate. Daly, who does not have a vote this year, said the public understood the US Fed's price stability mandate. Daly said there were no signs yet that energy prices were pushing up medium- or long-term inflation expectations. "It's too early to tell. If the conflict ends and oil prices pull back without transmitting to the broader economy, the fundamental dynamics from before the conflict are expected to return." She was committed to achieving the 2% inflation target but should not overreact to the expected duration of the energy shock. She said policy was "slightly restrictive," and if the war were resolved, it would pose downward pressure on inflation; the labour market was stable and not generating inflationary pressure. (Jin10 Data APP)

[US Fed's Kashkari: Next interest rate move uncertain due to Iran conflict] Minneapolis Fed President Neel Kashkari said the Middle East conflict had added uncertainty to the interest rate outlook. "Given the uncertainty surrounding the Iran war, I actually don't know what's going to happen," Kashkari said at an event in Marquette, Michigan. "If the Strait of Hormuz remains closed for an extended period, the next interest rate move could very well need to be upward." (Wallstreetcn)

According to CME "FedWatch": the probability of the US Fed holding rates unchanged through June was 96.4%, with a 3.6% probability of a cumulative 25 bps interest rate cut. The probability of holding rates unchanged through July was 90.2%, with a 9.5% probability of a cumulative 25 bps cut and a 0.2% probability of a cumulative 50 bps cut. (Jin10 Data APP)

Macro:

Data to be released today include: US April unemployment rate, US April seasonally adjusted non-farm payrolls, US April average hourly earnings YoY, US April average hourly earnings MoM, US May preliminary one-year inflation expectations, US May preliminary University of Michigan consumer sentiment index, US March wholesale sales MoM, Germany March seasonally adjusted industrial output MoM, Germany March seasonally adjusted trade balance, Switzerland April consumer confidence index, UK April Halifax seasonally adjusted house price index MoM, and Canada April employment figures.

In addition, a new round of domestic refined oil price adjustments will open. 2026 FOMC voter and Minneapolis Fed President Kashkari will participate in a fireside chat; 2026 FOMC voter and Cleveland Fed President Hammack will deliver a speech; FOMC permanent voter and New York Fed President Williams will deliver a speech; US Fed Governor Lisa Cook will deliver a speech; and Bank of England Governor Bailey will speak on global imbalances.

Crude oil:

As of the overnight close, oil prices on both markets rose, with WTI up 2.71% and Brent up 2.13%. Citi's global head of commodities research Max Layton said oil prices would continue to swing wildly until there was clarity on whether Iran and Trump could reach a deal. "It's hard to predict whether Iran will reach a deal, and in an environment where you simply don't know whether a deal will be reached, the market is inevitably news-driven and will experience wild swings." Crude oil fell for a third consecutive trading day on Thursday. Layton said the decline was partly driven by "the market's hope that the two sides could begin deal negotiations." However, physical crude oil market pressures in the Middle East persisted. Traders said that a key crude oil loading terminal in Oman, outside the Strait of Hormuz, experienced loading delays in April, disrupting shipping plans and potentially delaying deliveries to buyers. Layton said the global physical crude oil market had accumulated "quite substantial buffer inventory" of approximately 700 million to 800 million barrels over the past 12 months. "We are burning through this inventory rapidly," he said, but the impact would "manifest gradually over a longer period." He added that before actually lowering oil price forecasts, he needed to see whether Iran was ready to seriously reach a deal with the US. Last month, after the second round of US-Iran peace talks failed to take place, Citi raised its Brent crude benchmark price forecast by $15 to $110/barrel and pushed back its baseline expectation for the reopening of the Strait of Hormuz from mid-to-late April to the end of May. (Jin10 Data APP)

International Energy Agency (IEA) Executive Director Fatih Birol said the agency was prepared to release more crude oil from its strategic reserves if war-induced supply disruptions persisted. He added that the agency had so far released 20% of its available oil reserves to ease rising prices. Releasing additional crude oil onto the international market would limit demand for US crude at all levels. Demand side, Marathon's refinery in Carson, California reported that it planned to conduct flaring activities from May 8 to May 12 due to maintenance work. (Wallstreetcn)