US dollar fell on the week, metals generally rose, LME copper, aluminum, zinc and SHFE zinc each rose more than 1%, gold, silver and crude oil surged more than 5% on the week [Overnight Market]

SMM August 24 News:

Metal market:

Last Friday overnight, base metals on the domestic and overseas markets generally rose, with only SHFE tin falling, down 0.1%. LME copper, LME aluminum, LME zinc, SHFE zinc, and SHFE nickel all gained over 1%, with LME copper up 1.02%, LME aluminum up 1.79%, LME zinc up 1.99%, SHFE zinc up 1.37%, and SHFE nickel up 1.04%; the other metals rose within 1%. Alumina main contract rose 0.97%, and cast aluminum main contract rose 0.5%.

Last Friday overnight, ferrous metals collectively rose, with iron ore up 1.06% and hot-rolled coil up 1.03%. In terms of coking coal and coke, coking coal rose 2.42% and coke rose 3.51%.

Last Friday overnight, precious metals: Driven by the decline in the US dollar, COMEX gold rose 1.97% and COMEX silver rose 1.33%. On a weekly basis, COMEX gold rose 5.05%, recording its fifth consecutive weekly gain; COMEX silver rose 5.99%, marking its third straight weekly gain. Domestically, SHFE gold rose 2.36%, successfully breaking through the 1,000 yuan/g mark, and SHFE silver rose 2.15%. On a weekly basis, SHFE gold rose 4.4% and SHFE silver rose 6.47%.

As of 8:21 p.m. on August 22, last Friday overnight closing prices:

Macro front

Domestic:

[State Council Executive Meeting: Conduct maintenance and risk inspection of power equipment and facilities to ensure safe and stable operation of the power system]Li Qiang presided over an executive meeting of the State Council. The meeting pointed out that it is necessary to strengthen prevention beforehand and source control, conduct maintenance and risk inspection of power equipment and facilities, strictly control quality in all aspects of new project design, construction, and acceptance, and ensure the safe and stable operation of the power system. It is also necessary to enhance emergency response capabilities for power safety accidents, continuously promote the iterative upgrading of technical equipment, and improve the working pattern where all departments work together. (Jin Shi Data App)

[Ministry of Finance: Jan–Jul national general public budget revenue up 5.8% YoY]According to the latest data from the Ministry of Finance, from January to July this year, national general public budget revenue was 1.437 billion yuan, up 5.8% YoY, with the growth rate 1.1 percentage points higher than in H1. National general public budget expenditure maintained necessary intensity, and expenditure in key areas was well secured. From January to July, national general public budget expenditure was 1.629 billion yuan, up 1.3% YoY. (CCTV News)

[State Administration for Market Regulation: Embodied AI robots and solid-state power batteries included in the second phase of quality strengthening chain]On the morning of August 21, the State Administration for Market Regulation held a special press conference on "Promoting the Implementation of Quality Strengthening Chain."Zhang Leilei, Deputy Director of the Quality Development Bureau of the State Administration for Market Regulation, introduced at the meeting that on the basis of the successful completion of the first phase, the Administration has systematically planned and promoted the second phase of ten landmark projects for quality chain strengthening. While continuing key areas such as high-end instruments and meters, new energy, and industrial robots, it has expanded into new directions including embodied AI robots and solid-state power batteries, and added key areas such as machine tools, drones, and advanced synthetic biomanufacturing. Talking about the layout considerations for phase two projects, Zhang Leilei said that phase two adheres to the "three batches" optimization layout: continue a batch of key areas such as high-end instruments and meters, new energy, and industrial robots, and deepen breakthroughs; expand a batch of new directions such as embodied AI robots and solid-state power batteries, closely following industrial iterative development; add a batch of key areas such as machine tools, drones, and advanced synthetic biomanufacturing, targeting hot topics of industrial development. (Jin Shi Data APP)

On the US dollar front:

As of the close last Friday overnight, the US dollar index fell 0.02% to 98.85, with a weekly decline of 0.79%. TD Securities strategists noted in a report that additional guidance that Fed Chairman Kevin Warsh might provide at the Jackson Hole symposium this week could give investors "a slight sigh of relief." However, if Warsh continues to avoid providing forward guidance, it would be disappointing. They said: "The market will expect stability from Warsh, but the risk of disappointment remains high." The strategists believe that Warsh may try to improve communication, but forward guidance may still be insufficient. "The market will look for clues about his reaction function and a reaffirmation of the Fed's ability to fight inflation." The strategists expect Warsh's speech to be incremental rather than disruptive. (Jin Shi Data APP)

In addition, according to Bloomberg, economists raised their forecasts for US economic growth in the third quarter, reflecting upward revisions to expectations for consumer spending and private investment including capital expenditure in the AI sector. According to Bloomberg's latest monthly survey of economists, gross domestic product is now expected to grow at an annualized rate of 2.5% in Q3, up from the 2% forecast in the previous survey. Quarterly GDP forecasts through the end of 2027 remained largely unchanged, all within a narrow range of 2%-2.2%. Economists' inflation forecasts through the end of next year also saw little adjustment. The personal consumption expenditures price index excluding food and energy is expected to average 3.2% this year, before pulling back and averaging 2.5% for the full year 2027. With the so-called core PCE price indicator showing inflation is slowing, economists expect the US Fed to keep interest rates unchanged through the end of July next year. ((Bloomberg)

According to CME's FedWatch, the probability of the US Fed keeping rates unchanged through September stands at 59.9%, while the probability of a cumulative 25-basis-point hike is 40.1%. For October, the probability of no change is 45.3%, a cumulative 25-bp hike at 44.9%, and a cumulative 50-bp hike at 9.8% (Jin10 Data App).

On the macro front:

In the US this week, data to be released include the US weekly ADP employment change for the week ending August 8, the US June FHFA house price index month-on-month, the US June S&P/CS 20-city not seasonally adjusted home price index year-on-year, the US July new home sales annualized, the US August Conference Board consumer confidence index, the US August Richmond Fed manufacturing index, the US July core PCE price index year-on-year, the US July personal spending month-on-month, the US Q2 real GDP annualized quarterly revision, the US July core PCE price index month-on-month, the US July durable goods orders month-on-month, the US initial jobless claims for the week ending August 22, the US August Chicago PMI, the US 2026 nonfarm payroll base revision preliminary, the US August University of Michigan consumer sentiment final, and the US August one-year inflation expectations final. In Germany, data include the German Q2 not seasonally adjusted GDP year-on-year final, the German August IFO business climate index, the German September GfK consumer confidence index, the German August seasonally adjusted unemployment change, and the German August seasonally adjusted unemployment rate. In France, data include the French August CPI month-on-month preliminary and the French Q2 GDP year-on-year final. In the euro area, data include the euro area August industrial confidence index and the euro area August economic sentiment index. Other data to be released include the Swiss August ZEW investor confidence index, the Swiss August KOF economic barometer, the Canadian Q2 current account, the Canadian June GDP month-on-month, the Australian July not seasonally adjusted CPI year-on-year, the UK August CBI retail sales difference, and the Japanese July unemployment rate.

In addition, China will kick off a new round of price adjustment window for refined oil products. The Reserve Bank of Australia will release the minutes of its August monetary policy meeting. 2027 FOMC voter and Richmond Fed President Barkin will deliver a speech on "The Mysterious US Economy," and also attend a panel discussion. The Jackson Hole Global Central Banking Symposium will be held from August 27 to 29. Fed Chairman Warsh will deliver his first speech at the Jackson Hole Global Central Banking Symposium. Nvidia will report its earnings after the US market close on August 26.

Crude oil side:

Both oil prices fell overnight last Friday, with WTI down 0.22% and Brent down 0.19%. On a weekly basis, WTI rose 5.15% and Brent rose 5.74%, both recording a second consecutive week of gains. Trump again signaled tensions, with CCTV International News reporting that he claimed Iran is very eager to reach a deal, but he is unsure whether he really wants to reach one, because in his view, "the Strait of Hormuz is now US territory—it is US territory." Market concerns over tightening crude oil supply in the coming weeks have intensified.

Hedge funds sharply reduced their net short positions on European diesel to the lowest level in over two years, while adding new bullish bets, indicating that traders expect the historic fuel supply crisis to persist. Profit margins for producing diesel and light diesel from crude oil have risen to near record highs. Diesel supply has tightened significantly due to reduced crude oil supply from the Middle East and the ban on most Russian diesel exports following renewed Ukrainian attacks on refineries. With no signs of the crisis abating, hedge funds cut net short positions on light diesel (Gasoil) by 309 lots in the latest week, to the lowest level since July 2024, based on ICE Futures Europe data. Meanwhile, hedge funds added 1,498 lots in net long positions, pushing total long open interest to the highest level since the week before the outbreak of the US-Iran war. On a net basis, trader bullishness on light diesel reached its highest level in about six months. (Jin Shi Data APP)

Additionally, Citigroup noted in a client report on Thursday thatthe US-Iran conflict and disruption of the Strait of Hormuz have led to a cumulative global observable inventory destocking of approximately 519 million barrels from February to August 2026, with a daily average destocking of 3 million barrels.If this pace continues, OECD inventories could fall to the 70-day safety line as early as the end of 2027—a critical level last seen during the second oil crisis in the 1970s and 1980s. Meanwhile, refined oil products such as diesel have shown signs of localized crisis, and market concerns over the current situation are intensifying.

Citi maintains its base case scenario: the U.S. and Iran will reach an agreement in Q4 this year, leading to the reopening of the Strait of Hormuz, with Brent crude oil expected to pull back to the $60 range by 2027. (Wall Street Journal)