Macro Sentiment Bullish, SHFE Zinc Fluctuates Strongly [SMM Zinc Morning Comment]

Overnight, the US May CPI was below expectations; the US Fed kept the benchmark interest rate unchanged, with a hawkish dot plot; Powell stated that inflation has greatly alleviated but remains high; Nikkei News reported that the Bank of Japan is considering reducing its holdings of Japanese government bonds; IEA expects a large surplus in oil supply this decade; Hezbollah claimed attacks on multiple targets in northern Israel; PBOC accelerated efforts to reduce inventory of existing commercial housing; Ministry of Foreign Affairs: The US cannot stop China's technological progress.

Overnight, LME zinc opened at $2,787/mt, initially briefly dipping to $2,782/mt, then investors reduced short positions, and LME zinc fluctuated upwards. Into the night session, the release of CPI data below expectations led to a rapid increase in LME zinc, reaching a high of $2,899/mt, and finally closing up at $2,880/mt, up $93/mt, a gain of 3.36%. Trading volume reduced to 12,110 lots, and open interest reduced by 6,934 lots to 228,000 lots. LME zinc inventory fell by 1,450 mt to 257,900 mt, a decrease of 0.56%. The US released core CPI, with inflation data below expectations, boosting interest rate cut expectations. Non-ferrous metals rebounded, and LME zinc is expected to move narrowly fluctuating.

Overnight, the most-traded SHFE zinc contract (2408) opened at 23,780 yuan/mt, and rose to a high of 23,960 yuan/mt, then shifted lower to around 23,810 yuan/mt. At the end of the trading session, financial pressure continued to enter the market, and SHFE zinc moved upward to around 23,885 yuan/mt, narrowly fluctuating, finally closing up at 23,870 yuan/mt, up 335 yuan/mt, a gain of 1.42%. Trading volume increased to 54,470 lots, and open interest increased by 899 lots to 76,978 lots. SHFE zinc is expected to move narrowly fluctuating.