SMM, September 5:
In the metals market:
Overnight, base metals on both domestic and overseas markets showed mixed performance. LME zinc led the gains with a 1.1% increase, SHFE zinc rose 0.97%, SHFE nickel closed flat at 128,040 yuan/mt, LME aluminum led the declines with a 0.65% drop, and the remaining metals saw relatively small fluctuations in their % changes. The alumina main contract rose 0.44%, while the cast aluminum main contract fell 0.21%.
Overnight, ferrous metals generally rose. Iron ore led the gains with a 1.52% increase, stainless steel rose 0.69%, rebar rose 0.41%, and in coking coal and coke, coking coal rose 0.6% and coke rose 0.53%.
Overnight in precious metals, COMEX gold fell 1.38% and COMEX silver fell 1.31%. On the weekly chart, COMEX gold fell 1.16% and COMEX silver fell 1.43%, both recording declines for two consecutive weeks. Domestically, SHFE gold fell 1.32% and SHFE silver fell 1.46%. On the weekly chart, SHFE gold fell 2.8% and SHFE silver fell 3.38%.
As of 8:22 on September 5, overnight closing prices:
Macro front
Domestically:
[PBOC to conduct 500 billion yuan outright reverse repo operation next Monday] The People's Bank of China: On September 7, 2026, the People's Bank of China will conduct a 500 billion yuan outright reverse repo operation through fixed-quantity, rate tender, and multiple-price bidding, with a term of 3 months (89 days), maturing on December 5, 2026.
[Seven departments including the Cyberspace Administration of China jointly issued the Implementation Plan for Promoting the Coordinated Transformation and Development of Digitalization and Greenization (2026-2030)] Seven departments including the Cyberspace Administration of China jointly issued the Implementation Plan for Promoting the Coordinated Transformation and Development of Digitalization and Greenization (2026-2030). The plan states that by 2030, the low-cost and high-efficiency advantages of artificial intelligence will become more prominent, deeply empowering green and low-carbon technological innovation and industrial development. Energy efficiency in emerging fields such as computing power facilities and 5G base stations will be significantly improved, driving the renewable energy electricity consumption level in key areas such as computing power facilities to reach the renewable energy consumption responsibility weight level of their respective provinces. Digitalization and greenization in key areas such as agriculture, manufacturing, trade, consumption, and urban operations will be further advanced. The capacity of digital and intelligent technologies to empower ecological and environmental governance will continue to improve, and the coordinated development model of digitalization and greenization will strongly support the comprehensive green transformation and high-quality development of the economy and society. (Jin10 Data APP)
[MIIT issues the AI Entrepreneurship Support Plan for Small and Medium-sized Enterprises (2026-2028)] The General Office of the Ministry of Industry and Information Technology issued a notice on the AI Entrepreneurship Support Plan for Small and Medium-sized Enterprises (2026-2028). Through three years, in key areas such as industry applications, data services, and intelligent computing power, we will cultivate and form a large number of AI startups with strong innovation vitality and great growth potential, newly cultivate over 10,000 technology-based and innovative SMEs, exceed 2,000 specialized and sophisticated "little giant" enterprises, and see the emergence of a number of gazelle companies and unicorn companies. Focusing on the AI field, we will build 10 technology-based enterprise incubators and 10 national SME public service demonstration platforms (bases) to high standards, newly cultivate 10 national-level SME characteristic industrial clusters, continuously unleash the innovation vitality of AI SMEs, and initially form a high-quality development pattern in which AI empowers SMEs. (Jin10 Data APP)
US dollar:
As of the overnight close, the US dollar index rose 0.15% to 99.15, with a weekly decline of 0.53%. The August non-farm payrolls report beat expectations, prompting the market to increase bets on a Fed rate hike in September. On the data front, US job growth in August beat expectations, and the unemployment rate held steady, indicating that momentum in the US labour market may be stronger than previously thought. According to data released by the US Bureau of Labor Statistics on Friday, on the basis of upward revisions to employment data for the previous two months, US non-farm payrolls increased by 162,000 in August, exceeding all economists' expectations. Non-farm payroll growth was mainly driven by a rebound in leisure and hospitality employment and an increase in government sector employment. Meanwhile, construction and manufacturing also recorded relatively strong job growth. The unemployment rate held at 4.1%. The report shows that the US labour market is withstanding the uncertainty brought by the Iran war and inflationary pressures. Fed officials may view this report as evidence supporting the case for a rate hike, though next week's US CPI data will be key to the Fed's rate decision later this month. (Jin10 Data APP)
US President Trump posted: The jobs data just released is fantastic, beating all expectations (except mine!), with growth reaching two or even three times expectations, and you haven't seen the full picture yet! US employers added 162,000 jobs in August. Cut interest rates, because America's credit standing is far better than it was not long ago! A strong country means lower interest rates because its credit standing is better... It's that simple! We should have the lowest interest rates in the world, just like in the "old days." If the US does not agree to allow them to have huge trade surpluses (which we can stop immediately), then they should no longer be regarded as financial "elite" countries!Lower interest rates, or I will stop dealing with countries that have a trade surplus with us. The US Supreme Court, in its absurd and costly tariff ruling, explicitly acknowledged that the "President" has the absolute right to do so. This is far better than tariffs! The Federal Reserve Board, under this outstanding new leader, must become sensible, think from a different angle, and be a patriot for once. High interest rates put the US at an extremely unfair disadvantage, and I will never allow this to happen! (Jin10 Data APP)
Jeff Rosenberg, portfolio manager at BlackRock, said US job growth in August far exceeded expectations, highlighting the importance of the Consumer Price Index (CPI) data to be released next week. Fed policymakers are considering whether to raise interest rates based on this. He said, "This in some ways confirms what we know about the labour market and shifts the focus and pressure back to the inflation question. The key is whether inflation is rising, or whether it is not falling fast enough, which will determine whether the Fed raises rates at its September meeting." He said that if the CPI report released on 11 September continues to show improvement in inflation, "I think they will keep rates unchanged." (Jin10 Data APP)
"Fed mouthpiece" Nick Timiraos noted that ahead of the policy meeting on 15-16 September, Fed officials have made clear that inflation data will be the most important factor in deciding whether to raise rates, after the Fed has kept rates unchanged all year. Even though the strong August jobs report will not change this framework, it does clear one obstacle to a rate hike. If August employment data had continued to weaken on top of July's negative growth, the case against tightening monetary policy might have been more compelling: why raise rates when the labour market shows no signs of growth? However, after Friday's jobs report reversed July's negative employment growth and pushed the six-month average hiring pace to its highest level in more than two years, that argument no longer holds. (Jin10 Data APP)
Citigroup on Friday pushed back its forecast for the Fed's next interest rate cut from October 2026 to June 2027, citing stronger-than-expected nonfarm payroll growth in August and overall stability in the labour market. The brokerage had previously forecast 25-basis-point cuts in October 2026, December 2026, and January 2027, but now expects 25-basis-point cuts in June, September, and December 2027. (Jin10 Data APP)
According to CME "FedWatch": the probability that the Fed will keep rates unchanged in September is 39.7%, and the probability of a cumulative 25-basis-point rate hike is 60.3%. The probability of the US Fed keeping rates unchanged through October is 28.7%, the probability of a cumulative 25bp hike is 54.6%, and the probability of a cumulative 50bp hike is 16.7%. (Jin10 Data APP)
Other currencies:
Eurozone retail sales fell 0.6% in July, pointing to weak consumer spending; overall retail sales declined 0.4% in July after rising 0.2% in the previous month. However, compared with July 2025, eurozone retail sales rose 0.6%, and overall EU retail sales rose 1.0%. The monthly decline was driven mainly by weak non-food sales, with Germany particularly weak. Despite the monthly decline in retail sales, they remained slightly above year-earlier levels, suggesting consumer demand is slowing but has not yet contracted sharply. In addition, automotive fuel sales fell 0.8%, while food, beverages and tobacco consumption rose 0.4%, providing some support to retail sales. These data have no impact on the ECB, and the market widely expects the ECB to hike rates by 25bp at its upcoming meeting, raising the policy rate to 2.50%. (Jin10 Data APP)
BNP Paribas economists noted in a report that persistent energy price shocks, combined with the resilience of the eurozone economy, mean the ECB may hike rates once each in September and December. Economists expect the ECB to hike rates next week and may also raise growth and inflation expectations, which would further support the case for tighter monetary policy. Persistently higher energy prices and a strong economy will make second-round effects more likely, although signs remain limited for now. Economists said policymakers will still see risks to the inflation outlook as tilted to the upside. (Jin10 Data APP)
On the macro front:
Next week in China, data including China's August foreign exchange reserves, August trade balance, August import and export annual rates, and August CPI annual rate will be released; in the US, data including the August NFIB Small Business Optimism Index, August New York Fed 1-year inflation expectations, weekly change in ADP employment for the week ending August 22, bid yield for the 10-year Treasury auction on September 9, bid-to-cover ratio for the 10-year Treasury auction on September 9, initial jobless claims for the week ending September 5, August PPI annual rate, August PPI monthly rate, August existing home sales annualized, July wholesale sales monthly rate, August unadjusted CPI annual rate, August seasonally adjusted CPI monthly rate, August seasonally adjusted core CPI monthly rate, August unadjusted core CPI annual rate, September preliminary one-year inflation expectations, and September preliminary University of Michigan consumer sentiment index will be released; in the eurozone, data including the September Sentix investor confidence index, Q2 GDP annual rate revised, Q2 seasonally adjusted employment change quarterly rate preliminary, ECB deposit facility rate as of September 10, and ECB main refinancing rate as of September 10 will be released; in the UK, data including July three-month GDP monthly rate, July manufacturing output monthly rate, July seasonally adjusted goods trade balance, and July industrial output monthly rate will be released; in Germany, data including July seasonally adjusted industrial output monthly rate, July seasonally adjusted trade balance, and August CPI monthly rate final will be released; Switzerland's August seasonally adjusted unemployment rate and August consumer confidence index, France's July trade balance and July industrial output monthly rate, and Japan's July trade balance will also be released.
Note that on Monday, September 7, US markets will be closed for Labour Day: the NYSE will be closed, the Toronto Stock Exchange in Canada will be closed, CME Group precious metals and US crude oil futures trading will end early at 02:30 Beijing time on September 8, equity index futures trading will end early at 01:00 Beijing time on September 8, and ICE Brent crude oil futures trading will end early at 01:30 Beijing time on September 8 due to Labour Day.
In addition, Apple will hold its autumn product launch event with the theme "Shine a New Chapter, Come and Dazzle", ECB President Lagarde will speak at the Bundesbank's official dinner, the ECB will announce its interest rate decision, and ECB President Lagarde will hold a monetary policy press conference.
Crude oil:
Oil prices showed mixed performance overnight, with WTI down 0.09% and Brent up 0.35%. On a weekly basis, WTI surged 9.38% and Brent jumped 8.8%, driven mainly by renewed Middle East conflicts.
As the war between the US and Iran intensifies concerns over energy supply disruptions, hedge funds' bullish sentiment on Brent crude has risen to its highest level since May. ICE data showed that in the week ended September 1, speculators increased their net long position in ICE Brent crude by 37,837 contracts to 261,435 contracts, a 14-week high. Net long bets on gasoline soared to 89,263 contracts, the highest since last December, as gasoline prices hovered near record highs for September. Net long positions in Robusta coffee fell to 15,588 contracts, a 12-week low. Net short positions in London cocoa fell to 1,315 contracts, a 7-week low. (Wall Street CN)
US Treasury Secretary Bessent said oil prices could pull back sharply to $40 per barrel after the Iran conflict ends, and increased crude supply will drive US Treasury yields lower. Bessent said that after the Iran conflict ends, the oil market will see oversupply, "possibly seeing $50, $40 crude prices", as significant supply will enter the market. Affected by the recent US-Iran military conflict, Brent crude briefly rose above $95 on Friday, with WTI approaching $90. Bessent said the recent rise in energy prices has intensified market concerns about inflation and pushed up global benchmark bond yields, with the US 10-year Treasury yield rising this week to its highest level since 2023. Bessent also downplayed the impact of Norway's sovereign wealth fund's plan to reduce its US Treasury holdings, saying the fund simply wants to allocate to other US assets, including bonds related to Fannie Mae and Freddie Mac. (Jinshi Data APP)
Also note that this week, the EIA released its monthly Short-Term Energy Outlook, OPEC released its monthly crude oil market report (the exact release time of the monthly report is to be determined, generally published around 18-21 Beijing time), the IEA released its monthly crude oil market report, and China will open a new round of refined oil price adjustment window (to be determined).
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