SMM April 11 News: Metals market: Last Friday's overnight domestic market base metals showed mixed performance. SHFE copper rose 1.04%. SHFE aluminum rose 0.32%, SHFE lead fell 0.54%. SHFE zinc fell 0.59%. SHFE tin fell 0.09%. SHFE nickel fell 0.04%. In addition, the most-traded alumina futures contract rose 0.15%, and the most-traded foundry aluminum continuous contract rose 0.59%. Last Friday's overnight ferrous metals mostly rose. Iron ore rose 0.27%, stainless steel rose 2.01%, rebar fell 0.03%, and hot-rolled coil rose 0.06%. Coking coal and coke: coking coal rose 0.19%, coke fell 0.18%. Last Friday's overnight overseas market metals: LME base metals rose across the board. LME copper rose 1.27%. LME aluminum rose 1.8%, LME lead rose 0.26%. LME zinc rose 0.3%. LME tin rose 0.89%. LME nickel rose 0.44%. Last Friday's overnight precious metals : COMEX gold fell 0.98%, posting a two-week winning streak on a weekly basis with a 1.95% weekly gain; COMEX silver fell 0.54%, posting a three-week winning streak on a weekly basis with a 4.25% weekly gain. Last Friday's overnight SHFE gold fell 0.12%, posting a two-week winning streak on a weekly basis with a 1.22% weekly gain; SHFE silver rose 1.47%, posting a three-week winning streak on a weekly basis with a 3.65% weekly gain. Institutions including ANZ and Goldman Sachs stated that even as Middle East conflicts disrupted markets, gold is still likely to rebound in the long term. Analysts at these institutions believe that resilient central bank demand, persistent geopolitical uncertainty, expectations of US Fed interest rate cuts, and diversification away from US dollar-denominated assets all provide reasons for long-term bullishness. ANZ analysts Soni Kumari and Daniel Hynes said prices are expected to eventually rebound, as the deteriorating macro combination of economic growth and inflation paves the way for central banks to resume cutting interest rates. ANZ maintained its outlook, forecasting gold prices to reach $5,800 by year-end. Analysts wrote that central bank gold purchases are expected to remain a key support pillar, with official purchases in 2026 estimated at around 850 mt. ANZ's bullish stance echoes similar forecasts from Goldman Sachs and RBC made in early March. Goldman Sachs maintained its $5,400 forecast, citing continued central bank gold purchases and expectations of a 50-basis-point US Fed interest rate cut this year. Goldman Sachs analysts previously stated that if disruptions in the Strait of Hormuz persist, gold still faces tactical downside risks in the short term. However, prolonged conflict could accelerate diversification away from traditional Western assets, supporting gold prices in the long term. (Jin10 Data) As of 8:31 AM on April 11, last Friday's overnight closing prices: Macro front China: [Li Qiang Chairs Symposium on Economic Situation with Experts and Entrepreneurs] Li Qiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, chaired a symposium on the economic situation with experts and entrepreneurs on the afternoon of April 10, hearing opinions and suggestions on the current economic situation and the next steps for economic work. Li Qiang emphasized the need to promote high-quality and efficient development of the service industry, catering to people's needs throughout their entire life cycle and enterprises' needs across the entire process of production and operation. He called for thorough implementation of the service industry capacity expansion and quality improvement initiative, coordinating development and regulation, and cultivating more "China Services" brands. At the same time, he stressed the need to deepen and expand "AI+," accelerate the digital and intelligent transformation of manufacturing, and support the overall upgrading of the industrial system through deep integration and mutual empowerment of advanced manufacturing and modern services. Greater efforts should be made to promote employment and income growth for urban and rural residents, tap into employment potential across various channels and sectors, vigorously cultivate new occupations and positions, promote shifts in employment concepts and enhancement of vocational skills, formulate and implement income growth plans for urban and rural residents, and strengthen the virtuous cycle of resident income growth, domestic demand expansion, and economic development. (Xinhua News Agency) [Preview: The State Council Information Office Will Hold a Press Conference on April 14 to Brief on Import and Export Performance in Q1 2026] The State Council Information Office will hold a press conference at 10:00 a.m. on April 14, 2026 (Tuesday), inviting Wang Jun, Deputy Commissioner of the General Administration of Customs, to brief on import and export performance in Q1 2026 and answer questions from reporters. [MIIT: Accelerate Building an Efficient and Unified AI Chip Computing Interconnection Ecosystem and Resolutely Eliminate "Involution-style" Competition in the PV Industry] The Ministry of Industry and Information Technology held the 2026 National High-Quality Development Conference for the Electronic Information Manufacturing Industry on April 10 in Wuhan, Hubei Province. The conference emphasized adhering to a value-oriented approach, promoting high-quality development of the advanced computing industry, accelerating the building of an efficient and unified AI chip computing interconnection ecosystem, and driving the industry chain toward higher-value segments. It also stressed adhering to a problem-oriented approach, carefully analyzing the current challenges facing the industry, proposing targeted development roadmaps, resolutely eliminating "involution-style" competition in the PV industry, and enhancing the resilience and security of key industry chains and supply chains. [CSRC: Launch More ChiNext-related ETFs and Options, and Introduce ChiNext Stock Index Futures in Due Course] A spokesperson of the China Securities Regulatory Commission answered reporters' questions on the Opinions on Deepening ChiNext Reform to Better Serve the Development of New Quality Productive Forces, which mentioned enriching the product and service system. This includes optimizing the compilation of ChiNext-related indices, launching more ChiNext-related ETFs and options, introducing ChiNext stock index futures in due course, supporting fund advisory services in allocating ChiNext ETFs, incorporating ChiNext ETFs into the fund platform for transfer, better meeting the asset allocation and risk management needs of different investors, and enhancing investment convenience and attractiveness. [The Nationwide Mine Safety Risk Monitoring and Early Warning "Single Network" Has Been Basically Established] According to the Q1 regular press conference held by the National Mine Safety Administration, the nationwide mine safety risk monitoring and early warning "single network" has been basically established. Safety sensing data from all coal mines in normal production and construction, open-pit mines with high and steep slopes, tailings ponds, and 84% of non-coal underground mines in normal production and construction have been fully integrated into the national mine safety risk monitoring and early warning system. (Xinhua News Agency) [SSE: The Price Limit Ratio for Risk-Flagged Stocks on the Main Board Adjusted from 5% to 10%] The Shanghai Stock Exchange (SSE) publicly solicited opinions on the revision of the Shanghai Stock Exchange Trading Rules. The revision mainly includes the following: First, the scope of securities eligible for after-hours fixed-price trading was expanded from STAR Market stocks to all A-shares and exchange-traded open-end funds. The adjustment helps meet investors' demand for trading at closing prices, extends trading hours for related products, and facilitates the entry of medium and long-term capital into the market. Second, the trading method during the closing session for funds was changed from continuous auction to closing call auction, with the closing price determined through call auction, consistent with SSE-listed stocks. Third, adaptive revisions were made in line with rule changes and business needs, adjusting the price limit ratio for risk-flagged stocks on the main board from 5% to 10%, refining rule language, and optimizing provisions on disciplinary actions. (Jin10 Data) [New Energy Power and Generation in Five Southern Provinces Hit Record Highs] According to China Southern Power Grid, new energy power and generation across the five provinces of Guangdong, Guangxi, Yunnan, Guizhou, and Hainan recently hit record highs. The maximum power generation capacity exceeded 100 million kW for the first time, with daily power generation reaching 1.4 billion kWh, accounting for 30% of total daily power generation. (Xinhua News Agency) US Dollar: Last Friday, the US dollar index extended its decline from the previous four trading days, falling another 0.11% to close at 98.69. On a weekly basis, the US dollar index posted a second consecutive weekly decline, down 1.49% for the week. US inflation surged sharply in March, with the war with Iran driving gasoline prices to their largest single-month gain since 1967, significantly intensifying overall price pressures. Data released Friday by the US Bureau of Labor Statistics showed that the March Consumer Price Index (CPI) rose 0.9% MoM, in line with market expectations, marking the largest single-month increase since June 2022; it rose 3.3% YoY, accelerating significantly from February's 2.4% and hitting the highest level since 2024. Gasoline prices posted their largest single-month gain on record since 1967, almost single-handedly driving the overall monthly increase , contributing nearly three-quarters of the monthly gain. Core CPI, excluding food and energy, rose only 0.2% MoM, below the market expectation of 0.3%, offering some relief to the market and boosting short-term interest rate cut bets. However, economists warned that the second-round effects of this energy shock had not yet been fully reflected in core inflation, and April data faced the risk of further increases. The US dollar fell after the data release. The preliminary reading of the University of Michigan Consumer Sentiment Index for April plunged from 53.3 in March to 47.6, hitting a record low. The current conditions index fell to 50.1, hitting a record low; the expectations index dropped to its weakest level since 1980; and the perception of current financial conditions tied the worst reading since 2009. Consumers expected prices to rise at an annual rate of 4.8% over the next year. This figure surged 1 percentage point from March, marking the largest single-month increase since Trump announced sweeping tariff hikes a year ago. San Francisco Fed President Daly (2027 FOMC voter): Bringing inflation down to 2% is critically important, but doing so at the expense of employment would put households in a difficult position. US economic fundamentals are "solid," and the labour market is more stable. Risks to the US Fed's goals of full employment and inflation are balanced. It is necessary to watch how the conflict evolves and how enterprises pass through price increases. Policy is sufficiently restrictive to exert downward pressure on inflation, while also sufficiently balanced to support a stable labour market. Policy is in a good place, giving us more time to observe how the conflict resolves and how oil prices change. High CPI data would not surprise anyone. The real question is whether the ceasefire can hold — if it does, the high CPI will become "old news." (Wallstreetcn) On the macro front: Data to be released this week include: US March existing home sales annualized total, US March NFIB Small Business Optimism Index, US March PPI YoY, US March PPI MoM, China March trade balance in US dollars, China March trade balance, France March CPI MoM final, Eurozone February industrial output MoM, Canada February wholesale sales MoM, US April NY Fed Manufacturing Index, US March import price index MoM, US April NAHB Housing Market Index, Australia March seasonally adjusted unemployment rate, China March total retail sales of consumer goods, China March industrial value added of enterprises above designated size, UK February three-month GDP MoM, UK February manufacturing output MoM, UK February seasonally adjusted goods trade balance, UK February industrial output MoM, Eurozone March CPI YoY final, Eurozone March CPI MoM final, US initial jobless claims for the week ending April 11, US April Philadelphia Fed Manufacturing Index, US March industrial output MoM, Eurozone February seasonally adjusted current account, and Eurozone February seasonally adjusted trade balance. In addition, other events to watch this week included: the State Council Information Office held a press conference at 10:00 a.m. on Tuesday, April 14, 2026, where Vice Minister of the General Administration of Customs Wang Jun briefed on Q1 2026 import and export performance and answered questions from reporters; the International Monetary Fund (IMF) and the World Bank held their Spring Meetings, running through April 17; Bank of Japan Governor Ueda Kazuo visited the US from April 13 to 18 to attend the G20 and International Monetary and Financial Committee meetings; the IMF released its World Economic Outlook report; the US Fed Board of Governors hosted "Strengthening the US Economy Through Rural Investment: A Working Forum"; Bank of England Governor Bailey participated in a panel discussion at Columbia University; 2027 FOMC voter and Chicago Fed President Goolsbee participated in a panel discussion ahead of the Semafor 2026 World Economy Conference; US Fed Governor Barr delivered opening remarks at the working forum hosted by the US Fed Board of Governors; Philadelphia Fed President Paulsen, Richmond Fed President Barkin, Boston Fed President Collins, and US Fed Governor Barr participated in a fireside chat at the US Fed Board of Governors' working forum; European Central Bank President Lagarde delivered a speech; the National Energy Administration released total electricity consumption data around the 15th of the month; US Fed Governor Bowman delivered a speech at the Institute of International Finance forum; the US Fed released the Beige Book on economic conditions; Bank of England Governor Bailey delivered a speech on global economic imbalances on the sidelines of the IMF meetings; the National Bureau of Statistics (NBS) released the monthly report on residential selling prices in 70 large and medium-sized cities; the State Council Information Office held a press conference on the performance of the national economy; permanent FOMC voter and New York Fed President Williams delivered a speech; the Group of Twenty (G20) Finance Ministers and Central Bank Governors Meeting was held; 2027 FOMC voter and Richmond Fed President Barkin delivered a speech. (Jin10 Data) Crude oil: Last Friday, both oil futures fell overnight, with WTI down 2.29% and Brent down 1.73%. On a weekly basis, WTI futures declined 14.26% for the week, while Brent fell 13.55%. The market focused on progress in US-Iran peace talks. , crude oil futures prices saw relatively small changes as traders were about to head into the weekend, while the US and Iran plan to hold talks that could determine whether a ceasefire in the Middle East can be sustained. Scott Shelton of TP ICAP said: "Traders have basically pulled out of the market. The $7 fluctuations like yesterday seem to have occurred with very few human traders involved. All they were doing was necessary hedging or cleaning up positions to further reduce risk exposure." He also said: "Maybe after this weekend, we'll have a clearer picture of whether the gap between Iran and the US is too wide to reach a deal." (Jinshi Data) Islamic Republic of Iran Broadcasting (IRIB) said on its social media on the 10th that only 4 ships passed through the Strait of Hormuz in the past 24 hours, including one Iranian tanker and one Russian tanker. (Xinhua) Baker Hughes data showed that US drilling companies cut oil and gas rigs for the third time in four weeks. A senior White House official said that skepticism pervaded the White House. The official said that Trump appeared to have acknowledged in recent conversations with advisors that the Strait of Hormuz was unlikely to fully reopen in the short term. However, at the same time, Trump posted on social media on Thursday that oil supply would be restored soon, but he did not elaborate further. The US Department of Energy (DOE) will lend 8.5 million barrels of crude oil from the Strategic Petroleum Reserve to four companies. Hassett, Director of the White House National Economic Council: Gasoline prices are very high at present. I hope the surge in gasoline prices will not affect other areas. The Commodity Futures Trading Commission (CFTC): As of the week ending April 7, speculative net long positions in WTI crude oil futures increased by 5,520 contracts to 109,227 contracts. (Jinshi Data) Recommended Reading:

"Cut interest rates by 100 basis points!" Trump speaks out again On the evening of June 11, US President Trump posted on his social media platform "Truth Social" that the latest US CPI data showed positive results, and he called on the US Fed to cut interest rates by 1 percentage point (100 basis points). US Vice President Vance stated that the US Fed's refusal to cut interest rates was a dereliction of duty in monetary policy. Data released by the US Department of Labor showed that the full impact of Trump's across-the-board tariff hikes had not yet fully materialized, with US CPI inflation in May falling short of expectations across the board. The data indicated that the US unadjusted CPI year-on-year rate for May was 2.4%, lower than the market expectation of 2.5%; the seasonally adjusted CPI month-on-month rate for May was 0.1%, lower than the expected 0.2% and the previous value of 0.2%. Excluding food and energy costs, the core CPI rose 2.8% YoY, remaining at the lowest level since March 2021, with an expected value of 2.9% and a previous value of 2.8%; the seasonally adjusted core CPI month-on-month rate for the US in May was 0.1%, with an expected value of 0.3% and a previous value of 0.2%. The US Bureau of Labor Statistics stated that the continued weakness in energy and service prices offset the impact of price increases in other goods, while some key items originally expected to rise due to tariffs, particularly car and clothing prices, actually saw price decreases. The data showed that energy prices fell by 1% in the month, with gasoline prices dropping by 2.6%, and prices for new and used cars falling by 0.3% and 0.5%, respectively. Food prices rose by 0.3%, and housing prices also increased by 0.3%, while clothing prices unexpectedly fell by 0.4%, indicating that the cost increases brought about by tariffs had not yet been passed on to consumers. Nick Timiraos, known as the "Fed Whisperer," commented that the decline in car and clothing prices led to a lower-than-expected reading for the core CPI in May. Some forecasters had believed that these two items would show the early impact of tariffs in May. After the data release, spot gold prices continued to rise, breaking through $3,360 per ounce. The three major US stock index futures surged briefly but then fell. By the close, the S&P 500 index closed down 16.57 points, or 0.27%, at 6,022.24 points. The Dow Jones Industrial Average closed down 1.10 points, or 0.00%, at 42,865.77 points. The Nasdaq closed down 99.11 points, or 0.50%, at 19,615.88 points. The Nasdaq 100 index closed down 81.12 points, or 0.37%, at 21,860.80 points. Trump says "confidence is waning" in reaching a nuclear deal; international oil prices surge According to AFP, both the US and Iran made their latest statements on the US-Iran nuclear negotiations on June 11. US President Trump stated in an interview aired on the same day that his "confidence has waned" in reaching a nuclear deal with Iran. Meanwhile, Iran said on June 11 that if negotiations fail and a conflict breaks out between the US and Iran, it will target US military bases in the Middle East. Upon the news, the crude oil market reacted swiftly. WTI crude oil futures for July delivery closed up $3.17/bbl, a 4.88% increase, at $68.15/bbl. Brent crude oil futures for August delivery closed up $2.90/bbl, a 4.33% increase, at $69.77/bbl. What is the outlook for the cast aluminum alloy futures market? Yesterday, the most-traded AD2511 cast aluminum alloy futures contract closed at 19,400 yuan/mt, up 0.91%. Regarding the current operational logic of the cast aluminum alloy market, Xiao Yufei, head of the Nonferrous Metals Research Team at Nanhua Futures, believes that the supply surplus in the cast aluminum alloy industry will persist. The planned new capacity for domestic aluminum alloy ingots in 2024-2025 is 1.145 million mt/year. However, due to various constraints, the actual capacity that has come online is only 260,000 mt/year. It is expected that in 2025, the cast aluminum alloy industry will continue to see capacity growth but with slower commissioning. According to Xiao Yufei, the downstream consumption of cast aluminum alloy mainly flows into sectors such as transportation, machinery manufacturing, home appliances, and hardware. Among them, transportation vehicles, including cars, motorcycles, and EVs, account for over 70% of downstream demand. Therefore, the demand for cast aluminum alloy primarily depends on the performance of the automotive market. The automotive industry has generally performed well this year, with production and sales showing steady growth compared to the same period last year. However, considering that the H2 is approaching the off-season, the growth rate of cast aluminum alloy demand may slow down. In addition, aluminum scrap inventory is tight, and raw material procurement is difficult. The inability to restock in a timely manner has led to a continuous decline in the raw material inventory of secondary aluminum alloy enterprises. "Finished product inventories are at a relatively high level. Given the current loose supply situation, we believe that the inventory buildup trend of secondary aluminum alloy will persist for some time. Considering the high correlation between aluminum alloy prices and SHFE aluminum prices, spot and futures prices are more inclined towards a backwardation structure," Xiao Yufei said. Fu Ying, a nonferrous metals analyst at the Zheshang Futures Research Center, believes that the current cast aluminum alloy market is in a phase of weak supply and demand. The automotive market, a major end-use application for cast aluminum alloy, is currently in an off-season for production. Under the "produce based on sales" model of alloy enterprises, their operating rates will also decline accordingly. Meanwhile, the trend of weakening demand will become more pronounced, with both social inventory and raw material inventory showing continuous accumulation. Therefore, the spot price of cast aluminum alloy is expected to fluctuate around production costs. The first listed futures contract for cast aluminum alloy was AD2511, with a delivery month of November. According to Chen Xinyi, the head of the Non-Ferrous Metals and New Energy Team at Wuchan Zhongda Futures, the aluminum scrap recycling system is relatively "informal," which leads to a decrease in aluminum scrap recycling volume during holidays. Typically, aluminum scrap supply is relatively tight in Q4, and its prices hold up well compared to primary aluminum. From a demand perspective, ADC12 demand exhibits significant seasonal characteristics, with peak seasons generally occurring from September to January of the following year, and November being a peak consumption month. Therefore, the inter-month price spreads for the AD2511, AD2512, and AD2601 contracts are currently in a contango state. "Before the listing of cast aluminum alloy futures, spot market reference prices were mostly anchored to the Baotai price," Chen Xinyi said. Currently, the Baotai quote for ADC12 is 19,400 yuan/mt. Considering that some registered brands are priced at a discount to the Baotai price and the slim profit margins of alloy enterprises, companies have little incentive to price and sell futures contracts in advance. Currently, the downside room for aluminum scrap prices, which are closely linked to aluminum prices, is limited. This keeps ADC12 prices relatively strong in the short term, with the main operating range being 19,000-19,600 yuan/mt. In practice, according to Chen Xinyi, the ADC12-A00 price spread exhibits significant seasonal characteristics, weakening in Q2 and strengthening in Q3. Affected by policies, despite a capacity utilisation rate as high as 97%, electrolytic aluminum continues to destock, while the supply and demand of secondary aluminum show a surplus, with the current capacity utilisation rate being less than 50%. When the ADC12-A00 price spread is at historically high levels, the substitution effect of primary aluminum for aluminum scrap gradually becomes apparent. Some companies may consider adjusting their raw material ratios, and increased demand for electrolytic aluminum supports price increases, thereby driving the ADC12-A00 price spread to revert. In the short term, Fu Ying stated that cast aluminum alloy futures prices are expected to mainly follow aluminum price fluctuations, with cost support existing below. On the one hand, the most-traded cast aluminum alloy futures contract, AD2511, is still far from its delivery date, and the price trend of cast aluminum alloy is consistent with that of aluminum. The current low inventory and continuous destocking of electrolytic aluminum provide support for aluminum prices. On the other hand, the supply and demand of aluminum scrap are relatively tight, with aluminum scrap costs accounting for nearly 90% of the cost of cast aluminum alloy. The firmness of aluminum scrap prices supports ADC12 prices. However, affected by the traditional off-season, the upside room for cast aluminum alloy prices is also limited. Additionally, under the off-season consumption, the demand for selling hedging by cast aluminum alloy producers is high, which will suppress futures prices. Regarding the key points to be monitored subsequently, Fu Ying believes they mainly include changes in aluminum scrap supply, downstream demand, and the changes and impacts of spot pricing models after the listing of futures. Aluminum scrap supply determines the cost trend of cast aluminum alloy, while downstream demand affects the price spread fluctuations between cast aluminum alloy and primary aluminum. Stronger demand will drive the price spread between the two to revert. Currently, the spot price of cast aluminum alloy mainly refers to the quotes on information websites and the "enterprise quotes + premiums and discounts" model, lacking a relatively open and transparent market mechanism. After the listing of cast aluminum alloy futures, the number of market participants will gradually increase, which will help optimize the spot pricing model.

On Wednesday local time, data released by the US Department of Labor showed that the full impact of Trump's across-the-board tariff hikes had yet to be fully realized, with US CPI inflation in May falling short of expectations across the board. Following the data release, spot gold continued to rally, breaking through the $3,360/ounce mark, while the three major US stock index futures surged in the short term. Specific data revealed that the US unadjusted CPI year-on-year rate for May was recorded at 2.4%, lower than the market expectation of 2.5%; the seasonally adjusted CPI month-on-month rate for May was recorded at 0.1%, lower than the expected 0.2% and the previous value of 0.2%. Excluding food and energy costs, the core CPI rose 2.8% YoY, remaining at the lowest level since March 2021, with an expected value of 2.9% and a previous value of 2.8%; the seasonally adjusted core CPI month-on-month rate for the US in May was recorded at 0.1%, with an expected value of 0.3% and a previous value of 0.2%. The US Bureau of Labor Statistics pointed out that persistent weakness in energy and service prices offset the impact of price increases in other goods, while some key items originally expected to rise due to tariffs, particularly car and clothing prices, actually saw price reductions. Data showed that energy prices fell 1% in the month, with gasoline prices dropping 2.6%, and prices for new and used cars falling 0.3% and 0.5%, respectively. Food prices rose 0.3%, and housing prices also increased by 0.3%, while clothing prices unexpectedly declined by 0.4%, indicating that the cost increases from tariffs had not yet been passed on to consumers. Nick Timiraos, known as the "Fed Whisperer," commented that the decline in car and clothing prices contributed to the core CPI reading in May falling short of expectations. Some forecasters had believed these two categories would show the early impact of tariffs in May. Economists expect that, as most retailers are still selling goods stockpiled before the tariffs took effect, the full impact of President Trump's across-the-board tariff hikes on inflation has yet to be fully realized. Inflation is expected to accelerate in the second half of this year, with Walmart indicating last month that it would begin raising prices in late May and June. Seema Shah, Chief Global Strategist at Principal Asset Management, stated, "Today's below-expectation inflation data is reassuring—but only to a certain extent. It's premature to conclude that price shocks won't materialize." Shah believes that the impact of tariffs may not be reflected in inflation data until late summer, due to inherent delays in economic data, ongoing changes in tariff policies, merchants stockpiling goods in advance and offering discounts, and some costs being absorbed by retailers and manufacturers themselves. Market pricing suggests that the US Fed may not consider further interest rate cuts before September, as policymakers are assessing the impact of tariffs on inflation. Trump has been urging the US Fed to lower interest rates amid cooling inflation and a slowing labour market. The CME Group's FedWatch Tool indicates that the probability of an interest rate cut by the US Fed in June is almost zero, while the likelihood of a cut in September is close to 70%. Goldman Sachs analysts stated that mild inflation data in May suggests that tariffs are not having a significant impact at present, as companies have been using existing inventory or slowly adjusting prices due to uncertain demand. "Although we may see some price increases for certain goods in the future, service prices are expected to remain stable, suggesting that any rise in inflation is likely to be temporary." Brian Jacobsen, chief economist at Annex Wealth Management, said that the current CPI data is much milder than expected. While some imported food prices have risen significantly, such as bananas by 3.3% and toys by 2.2%, egg prices have fallen by 2.7%. Greater stability in trade policies would greatly help avoid runaway inflation. This also reaffirms why the US Fed may shift its risk focus from inflation threats to threats to economic growth.

The total trading volume of Shanghai-Shenzhen Stock Connect today was RMB 143.208 billion, with China Merchants Bank and CATL ranking first in terms of individual stock trading volume on the Shanghai Stock Connect and Shenzhen Stock Connect, respectively. In terms of the most-traded contract's open interest by sector, the non-bank financial sector saw the highest net inflow of open interest. In terms of ETF trading volume, the Hong Kong Stock Exchange Innovative Drug ETF (513120) ranked first. In terms of the most-traded futures contracts' open interest, the number of short positions reduced in the IC contract exceeded that of long positions. On the Dragon Tiger List, Anglikang received RMB 235 million in purchases from institutions; Limin Chemical received RMB 105 million in purchases from institutions; Royal Silver was sold off by institutions for RMB 115 million; China Superconductor was sold off by institutions for over RMB 60 million; Junyao Health was sold off by institutions for over RMB 60 million; Chutianlong received over RMB 90 million in purchases from the Yichang Yanjiang Avenue Business Department of Guotai Haitong Securities; Nanhua Futures was sold off by two quantitative trading seats. I. Top 10 Stocks by Trading Volume on Shanghai-Shenzhen Stock Connect Today, the total trading volume on the Shanghai Stock Connect was RMB 68.229 billion, while that on the Shenzhen Stock Connect was RMB 74.979 billion. Among the top 10 stocks by trading volume on the Shanghai Stock Connect, China Merchants Bank ranked first; Kweichow Moutai and JAC ranked second and third, respectively. Among the top 10 stocks by trading volume on the Shenzhen Stock Connect, CATL ranked first; BYD and East Money ranked second and third, respectively. II. Main Large-Order Open Interest by Sector and Individual Stocks In terms of sector performance, rare earth permanent magnets, gaming, auto parts, and securities sectors led the gains, while controlled nuclear fusion, other power supply equipment, biological vaccines, and communication services sectors led the losses. In terms of the most-traded sector's open interest monitoring data, the non-bank financial sector saw the highest net inflow of open interest. In terms of sector open interest outflows, the pharmaceutical sector saw the highest net outflow of open interest. In terms of the most-traded individual stock's open interest monitoring data, the sectors of the top 10 stocks with net inflows of open interest were relatively scattered, with N-Insta360 ranking first in terms of net inflows. The sectors of the top 10 stocks with net outflows of open interest were relatively scattered, with Lianhe Tech ranking first in terms of net outflows. III. ETF Trading Volume Among the top 10 ETFs by trading volume, the Hong Kong Stock Exchange Innovative Drug ETF (513120) ranked first, while the CSI 300 ETF (510300) ranked second. Among the top 10 ETFs by MoM growth in trading volume, the Germany ETF (159561) ranked first with an 110% MoM increase in trading volume from yesterday; two rare earth ETFs ranked second and third, with the Rare Earth ETF Fund (516150) ranking second with a 93% MoM increase in trading volume. IV. Most-Traded Futures Contracts' Open Interest Among the most-traded contracts of the four major stock index futures, both longs and shorts reduced their positions in the IH, IC, and IM contracts, with longs reducing more positions in the IH and IM contracts and shorts reducing slightly more positions in the IC contract; both longs and shorts increased their positions in the IF contract, with shorts increasing more positions. V. Dragon Tiger List 1. Institutions Today, the activity level of institutions on the Dragon Tiger List was moderate. On the buying side, Angelic, a concept stock of innovative drugs, was bought by institutions for 235 million yuan; Limin Chemical, a pesticide stock, was bought by institutions for 105 million yuan. On the selling side, Yuyin, a concept stock of stablecoins, was sold by institutions for 115 million yuan; Zhongchao Holding, a nuclear power stock, was sold by institutions for over 60 million yuan; Junyao Health, a dairy stock, was sold by institutions for over 60 million yuan. 2. Retail Investors The activity level of first-tier retail investors declined significantly. Baili Electric, a concept stock of controllable nuclear fusion, was sold by three first-tier retail investor seats for a total of over 200 million yuan, and the stock was also sold by a seat of Shanghai-Hong Kong Stock Connect for over 100 million yuan; Chutian Dragon, a concept stock of stablecoins, was bought by the Yichang Yanjiang Avenue Business Department of Guotai Haitong Securities for over 90 million yuan. The activity level of quantitative funds was moderate. Baili Electric was sold by two quantitative seats; Nanhua Futures was sold by two quantitative seats.

The 2025 SMM (3rd) Wire and Cable Industry Development Conference & Wire and Cable Industry Exhibition concluded successfully! SMM, May 26: Metal Market: As of the daytime close, domestic market base metals generally declined, with only SHFE copper and SHFE lead rising together. SHFE copper rose by 0.57%, and SHFE lead rose by 0.12%. SHFE zinc fell by 0.52%, while the rest of the metals dropped slightly. The main alumina contract fell by 3.77%, recording three consecutive days of decline. In addition, the main lithium carbonate contract fell by 2.31%, reaching a new low of 59,920 yuan/mt during the session, the lowest since its futures listing. The main polysilicon contract fell by 3.92%. The main silicon metal contract fell by 3.67%, hitting a record low of 7,605 yuan/mt during the session since its listing. The main European container shipping contract fell by 5.81%. The ferrous metals series declined collectively. Iron ore and HRC both fell by over 2%, with iron ore dropping by 2.21% and HRC by 2.03%, while rebar fell by 1.67%. In the coking coal and coke segment, coking coal fell by 1.96%, and coke fell by 1.72%. In the overseas metal market, the LME metal market was closed for the day due to the Spring Bank Holiday. In precious metals, as of 15:03, COMEX gold fell by 0.78%, while COMEX silver rose by 0.26%. Domestically, SHFE gold rose by 0.29%, and SHFE silver rose by 0.49%. Market conditions as of 15:03 today 》Click to view the SMM Market Dashboard Macro Front Domestic Developments: [8 Departments: Cultivate Around 100 National Leading Enterprises in Digital and Intelligent Supply Chains by 2030] Eight departments, including the Ministry of Commerce, the National Development and Reform Commission (NDRC), the Ministry of Education, the Ministry of Industry and Information Technology, the Ministry of Transport, the Ministry of Agriculture and Rural Affairs, the State Taxation Administration, and the National Data Administration, recently jointly issued the "Special Action Plan for Accelerating the Development of Digital and Intelligent Supply Chains." The "Action Plan" makes forward-looking, comprehensive, and systematic arrangements for the development of digital and intelligent supply chains. It proposes the use of new technologies such as artificial intelligence, the Internet of Things, and blockchain to promote the digital, intelligent, and visual transformation of supply chains with a "one-chain-one-policy" approach. By 2030, a replicable and scalable model for the construction and development of digital and intelligent supply chains will be formed. A deeply embedded, smart, efficient, and autonomous and controllable digital and intelligent supply chain system will be basically established in important industries and key areas. Around 100 national leading enterprises in digital and intelligent supply chains will be cultivated, further enhancing the resilience and security level of China's industrial and supply chains. [PBOC Net Injection of 247 Billion Yuan in Open Market Operations] The People's Bank of China (PBOC) conducted 382 billion yuan in 7-day reverse repo operations today, with an operating interest rate of 1.40%, unchanged from the previous rate. With 135 billion yuan of 7-day reverse repo operations maturing today, a net injection of 247 billion yuan was achieved. ► The central parity rate of the RMB against the US dollar in the inter-bank foreign exchange market on May 26 was 7.1833 yuan per US dollar. US dollar: As of 15:03, the US dollar index fell by 0.29% to 98.81. According to CCTV News, on the 25th (local time), US President Trump stated that the EU had requested an extension of the tariff negotiation deadline until July 9, and he had agreed to this request. Previously, on the 23rd, Trump posted on social media suggesting a 50% tariff on goods from the EU starting from June 1. The annualized total of new home sales in the US in April was 743,000 units, the highest since February 2022. The market had previously expected 693,000 units, with the revised figure for March being 670,000 units and the initial estimate being 724,000 units. Builders have reduced prices to attract buyers, but rising mortgage rates and economic uncertainty remain unfavourable factors for the housing market. Federal Reserve Governor Cook pointed out on Friday that the high tariffs announced by the US government last month triggered financial market volatility but did not lead to a severe US market failure like that during the COVID-19 pandemic. However, she added that this experience would help "us continuously improve our ongoing assessment of the stability of the financial system." Chicago Fed President Goolsbee said in an interview with CNBC that US companies want to see consistent trade policies before making major investments or other decisions, and that President Trump's new threat to impose a 50% tariff on EU imports is a "terrible" proposal for the supply chain. (Wenhua Comprehensive) Macro: Today, the revised reading of the leading indicator change for Japan in March and the year-on-year rate of Spain's PPI in April will be released. In addition, it is worth noting that Fed Chairman Powell will deliver a commencement address at Princeton University's graduation ceremony, and ECB President Lagarde will speak at the Hertie School in Berlin. On May 26 (Monday), due to the Memorial Day holiday in the US and the Spring Bank Holiday in the UK, trading hours in the financial markets will be adjusted. The holiday arrangements for overseas exchanges are as follows (all in Beijing time): 》Public holidays in the UK and US today, holiday arrangements for overseas exchanges at a glance Crude oil: As of 15:03, oil prices in both markets rose together, with US crude oil up 0.29% and Brent crude oil up 0.23%. This follows the extension of the deadline for trade negotiations between the US and the EU by US President Trump, alleviating concerns that US tariffs on the EU could harm the global economy and fuel demand. "Crude oil and US stock index futures surged this morning after US President Trump extended the deadline," said Tony Sycamore, an IG market analyst. Sycamore noted that trade and tariff news, along with ongoing fiscal concerns, would be the main uncertainties affecting risk sentiment and crude oil prices this week. In its closely watched report, US energy services firm Baker Hughes said that the number of oil and natural gas rigs operated by US energy firms fell for the fourth consecutive week this week, reaching the lowest level since November 2021. Data showed that the total number of US oil and natural gas rigs, a leading indicator of future production, decreased by 10 to 566 in the week ending May 23, marking the largest weekly decline since September 2023. It was also the first time since September 2024 that the number of active US oil and natural gas rigs had declined for four consecutive weeks. Baker Hughes said this brought the total number of active rigs down by 34, or 6%, YoY. Oil price gains were capped by expectations that OPEC+, which consists of the Organization of the Petroleum Exporting Countries and its allies, might decide to increase July's oil production by another 411,000 barrels per day (bpd) at its meeting next week. Suvro Sarkar, chief energy analyst at DBS Bank, said that oil was already under pressure from OPEC's strategy of accelerating production increases and a "mini oil price war." He added, "OPEC+'s decision in the coming days could curb oil price gains." This month, it was reported that OPEC+ might scrap the remaining voluntary production cuts of 2.2 million bpd by the end of October, after having already raised its production targets for April, May, and June by about 1 million bpd. Warren Patterson, head of commodities strategy at ING, wrote in a report to clients that OPEC+'s decision to increase production should keep the market well-supplied in the second half of the year. (Comprehensive report from Wenhua) SMM Daily Review ► RMB Exchange Rate Rises, Immediate Losses on Imported ADC12 Narrow Again [Daily Review of ADC12 Prices] ► Manganese Plants Maintain Firm Pricing Sentiment, Spot Prices Remain Stable [SMM EMM Daily Review] ► Silver Prices Test Previous Highs, Downstream Buyers Stock Up at Lower Levels, Trading Sentiment Moderate [SMM Daily Review]

As trade conflicts between the US and the UK, as well as China, have eased somewhat, Wall Street investors' concerns about Trump's tariffs have diminished recently, with US stocks rising for five consecutive days last week and approaching record highs again. However, just as one wave subsides, another arises. This week, a new obstacle has emerged for US stock investors—this time, it's not about tariffs, but about the US debt outlook. Moody's Downgrades US Credit Rating On Friday evening last week, US Eastern Time, Moody's Investors Service announced that it had downgraded the US government's top credit rating from Aaa to Aa1, blaming successive US presidents and members of Congress for the ballooning budget deficit. Moody's stated that there are few signs of the US budget deficit shrinking. As a result, on Monday morning this week, medium and long-term US Treasuries, US stock index futures, and the US dollar all fell, reflecting investors' growing concerns about the US economic outlook. Currently, the US Congress is discussing more unfunded tax cuts. However, since US President Trump took office, he has been wielding the "tariff stick" indiscriminately and attempting to overturn the long-standing commercial partnerships the US has established with European countries and Canada, making the US economic outlook appear increasingly bleak. On Monday this week, the yield on 10-year US Treasuries, after climbing at the end of last Friday, remained largely around 4.5%, reaching 4.515% as of press time, up 7.6 basis points. The yield on 30-year Treasuries rose by 10 basis points, pushing it above 5% to its highest level since November 2023 and close to its historical peak in mid-2007. As of press time, the S&P 500 futures were down 1.08%, and the Nasdaq 100 futures were down 1.35%. US Asset Attractiveness May Weaken Max Gokhman, Deputy Chief Investment Officer at Franklin Templeton Investment Solutions, said, "Given the accelerating pace of unfunded fiscal relief measures, it's not surprising that the US Treasury rating has been downgraded." "(The US') debt servicing costs will continue to climb as major investors (including sovereign and institutional investors) gradually shift from US Treasuries to other safe-haven assets... Unfortunately, this could trigger a steeper bearish spiral in US Treasury yields, exert further downward pressure on the US dollar, and reduce the attractiveness of the US stock market." In an earlier report, Wells Fargo strategists Michael Schumacher and Angelo Manolatos told clients that they expected "10-year and 30-year US Treasury yields to rise by an additional 5-10 basis points due to Moody's downgrade." Although a rise in government bond yields typically boosts a country's currency, for the current US, market concerns about US debt may exacerbate doubts about the US dollar. Currently, the US dollar index has seen a slight decline in the morning session, currently standing at 100.85, down 0.24%. Meanwhile, media data shows that the sentiment among options traders has reached its most pessimistic level in five years. In a report to clients, Subadra Rajappa, a strategist at Société Générale, wrote, "Higher long-term bond yields will increase the (US) government's net interest costs and deficit... In the long run, the erosion of the safe-haven status of US Treasuries will affect the US dollar and foreign demand for US Treasuries and other US assets."

"The joint statement significantly exceeded expectations! Both sides demonstrated a more pragmatic attitude, which will influence the market's judgment on the overall global economic and trade conflicts." On May 12, the Ministry of Commerce released the joint statement on the China-US economic and trade talks in Geneva, and a foreign investment banker shared his assessment immediately. The results of the "Joint Statement on the China-US Economic and Trade Talks in Geneva" released by China and the US show that: The US has reduced the additional tariffs of up to 125% imposed on China since April 2, retaining only a 10% tariff increase, with the remaining 24% tariff increase suspended for the initial 90-day period; In response, China has reduced the additional tariffs of up to 125% imposed on the US since April 4, also retaining only a 10% tariff increase, with the remaining 24% tariff increase suspended for the initial 90-day period. The magnitude of tariff adjustments in the first round of negotiations significantly exceeded market expectations, which is also the strongest consensus in the market. The joint statement was released after the A-share market closed, leading to significant fluctuations in major asset classes, with both stocks and foreign exchange markets rallying, while the bond market experienced a temporary setback. From the perspective of the stock market, the Hong Kong stock market surged rapidly, with the Hang Seng Index/Hang Seng Tech Index closing up 3.0%/5.2% respectively. The FTSE China A50 Index futures and MSCI China A50 Connect Index futures both rose by over 2%. The three major US stock index futures also rallied sharply, with the S&P 500 and Nasdaq 100 index futures rising by about 3%, and the Dow Jones futures rising by over 2%. From the perspective of the foreign exchange market, the offshore RMB strengthened by over 100 basis points against the US dollar in the short term, breaking through the 7.2 mark. From the perspective of safe-haven assets such as bonds and gold, the decline in Treasury futures widened, with the 30-year Treasury futures falling by over 1.3% and the 10-year Treasury futures slightly declining by 0.5%. COMEX gold fell sharply, with a decline of over 3.6% at one point. The joint statement has sparked a huge response. What are the next highlights? How will it affect the allocation of major asset classes in the market? Several public fund companies provided interpretations immediately. "Rare Consensus on Tone", Multiple Foreign-Invested Public Funds Bullish on Improved Risk Appetite in Equity Markets As early as the morning of May 12 before the market opened, news emerged that substantial progress had been made in the high-level economic and trade talks between China and the US. Song Yu, Chief China Economist at BlackRock, stated that the rare consensus on tone demonstrated by both China and the US reflects a high level of agreement between the two sides. Progress in China-US relations and increased support from domestic economic policies are important reasons for the recent improvement in the macroeconomic situation. It is expected that despite significant progress in China-US relations, economic policies will continue to be intensified to maintain the positive momentum achieved since the beginning of the year. This series of changes should alter the confidence of domestic and overseas investors in Chinese assets, benefiting the Chinese market. Following the release of the "China-US Joint Statement on Geneva Economic and Trade Talks" by China and the US after the afternoon market close, J.P. Morgan Asset Management summarized that the key points and impacts of this joint statement include the following: 1. The statement effectively cooled down the earlier trade disputes between China and the US, with both sides making certain concessions by reducing and suspending some of the previously imposed tariffs. This not only created a friendly environment for subsequent negotiations but also ended the earlier suspension of China-US trade due to excessively high tariffs, facilitating the orderly resumption of economic and trade activities between the two sides. 2. Both sides agreed to establish a regularized dialogue mechanism, which will facilitate timely communication, resolve differences, avoid unnecessary frictions, and enhance the stability of future negotiations. 3. The positive start to trade talks between China and the US, two major economies, will help alleviate concerns about global supply chain disruptions and economic recession. "The extent of tariff reductions this time exceeded expectations, reflecting that both China and the US recognize the economic reality that tariffs will hit global growth, and that dialogue and negotiation are better choices for mitigating risks," J.P. Morgan Asset Management said. The capital markets responded positively immediately, with major Hong Kong stock indices and US stock index futures rising in response, along with increases in US Treasury yields and the US dollar index. The 90-day tariff suspension period has bought both sides time to reach further consensus, but it still brings certain pressure to the negotiation process, and the progress of subsequent consultations between the two sides needs to be observed. It is expected that the overall risk sentiment in the capital markets may ease somewhat, and after the risk release and rebound, the markets may return more to economic and earnings fundamentals. Morgan Stanley Funds also expressed that the outcome of the talks far exceeded expectations. "Since the tariff hikes by both sides, there has been limited contact. From the initial statement last week to the current talks, the progress has been rapid, indicating that the current high tariffs are a lose-lose situation, and tariff reductions are in the interests of both China and the US," Morgan Stanley Funds further pointed out. For the market, we believe that the outcome of the talks will significantly enhance investors' risk appetite. If the future US tariff rates on China can be maintained at the reduced levels, the pressure on China's exports will significantly decrease, and expectations for the macroeconomic fundamentals will also be somewhat repaired. Therefore, subsequent market opportunities may further increase. How Will This Impact A-Shares and Hong Kong Stocks? Institutions Express "Optimism" Looking ahead, the unexpected adjustment of China-US tariff policies sends a positive signal, and many fund companies have expressed optimism about the market. Invesco Great Wall Fund pointed out that the extent of tariff reductions in this round of China-US negotiations far exceeded market expectations, possibly due to the US supply chain's reliance on China and the enhancement of China's comprehensive national strength, which will help boost short-term market risk appetite.After tariffs return to an acceptable level, the recovery of the domestic economy and corporate earnings is expected to return to normal, with fundamentals anticipated to improve. In the short term, it cannot be ruled out that some funds will take profits. However, both earnings and valuations are currently in a relatively favorable state. Going forward, attention needs to be paid to changes in tariff policies after the 90-day exemption period. In the medium term, the Chinese market boasts advantages such as strong policy support and a well-established institutional framework. Since the beginning of the year, there have been favorable developments in both technology and geopolitical narratives. Meanwhile, from a valuation perspective, the current valuation levels of major A-share indices are highly attractive in both horizontal and vertical comparisons. Combined with the expectation that economic fundamentals and corporate earnings will enter a cycle of improvement and recovery, we remain optimistic about the medium-term performance of the A-share market. At the allocation level, many fund companies have mentioned that in the short term, enterprises in the export and "go global" chains will directly benefit. Morgan Stanley Funds stated that export chains previously impacted by tariffs are expected to recover, with a concentration in the midstream manufacturing sector. Invesco Great Wall Fund further pointed out that in the short term, enterprises in the export and "go global" chains will directly benefit, and related sectors are expected to have relatively strong performance in stages. It is recommended to pay attention to export chain industries such as consumer electronics, components, machinery, and auto parts. The significant improvement in Sino-US trade negotiations has notably enhanced investors' risk appetite, and the dividend style may exhibit mediocre performance in the short term. In the medium term, after the impact of tariffs diminishes, attention can be focused on sectors experiencing a rebound in prosperity. Among them, the breakthrough by DeepSeek accelerates the development of the AI industry, with infrastructure and application segments within the AI industry chain remaining important medium-term investment themes. Ping An Funds also holds a positive view on the technology sector, believing that this unexpected joint statement can not only alleviate the economic tail risks brought about by global trade issues but also boost the previously sluggish sentiment of global risky assets in the short term. Therefore, for A-shares and Hong Kong stocks, growth stocks, which are more sensitive to the denominator, may benefit more in the short term. It is recommended to actively pay attention to sectors such as TMT, robotics, pharmaceuticals in A-shares, and the Hang Seng Tech Index in Hong Kong stocks. Bond market under short-term pressure, with appropriate attention to swing trading In the bond market, tariff negotiations significantly exceeded market expectations, causing bond prices to fall. The 10-year government bond yield rose by 5.55 basis points to 1.6775%, while the 30-year government bond yield increased by 6.15 basis points. Regarding the reasons, Invesco Great Wall Fund stated that the bond market, considering that tariff easing may enhance risk appetite and weaken the impact on fundamentals, anticipates that the next round of monetary easing may be more delayed, and has responded accordingly. Regarding the subsequent outlook for the bond market, Invesco Great Wall believes that bond market risks in May may be relatively controllable. With monetary policy returning to normalization, medium- and short-term bonds offer higher certainty after adjustments, while the long end may be more volatile. Appropriate attention can be paid to swing trading. Although there may be short-term pressures, institutions should not overlook the bond market. Another fund company stated that in the short term, with the improvement of economic growth expectations, an increase in risk appetite, and adjustments to expectations for monetary easing, there is a certain degree of adjustment pressure in the bond market. However, considering that the 7-day reverse repo rate was lowered by 10 basis points last week, the probability of the 10-year Treasury bond yield returning to 1.8% is relatively small. Therefore, it may be advisable to consider strategic positioning amidst these adjustments. The rationale for this judgment is that, looking ahead, as substantive progress is made in Sino-US economic and trade negotiations, bond market investors' expectations will be revised. Firstly, expectations for an economic downturn will be corrected, as the economy may perform better than previously anticipated, and the deterioration of the external trade environment may be limited. Secondly, expectations for monetary easing will decline in phases. Last week, at a press conference held by the State Council Information Office, it was announced that RRR cuts and interest rate cuts would be implemented. The market believes that as the pressure on the economic fundamentals gradually increases, there will be further opportunities for RRR cuts and interest rate cuts in the future. However, currently, the necessity for RRR cuts and interest rate cuts in the short term is decreasing.

At 15:00 Beijing time on Monday, the Ministry of Commerce of China issued a joint statement on the US-China Geneva Economic and Trade Talks. This significant statement indicated that both sides committed to taking a series of measures before May 14, 2025, including revising and rescinding additional tariffs imposed on each other's goods, as well as suspending or rescinding non-tariff countermeasures. Additionally, both sides will establish mechanisms to continue consultations on economic and trade relations, possibly in the US, China, or a third country. The spokesperson for the Ministry of Commerce of China stated that the US committed to rescinding a total of 91% of the additional tariffs imposed on Chinese goods under Executive Order 14259 of April 8, 2025, and Executive Order 14266 of April 9, 2025, and revising the 34% reciprocal tariffs imposed on Chinese goods under Executive Order 14257 of April 2, 2025. Among these, the imposition of 24% of the tariffs will be suspended for 90 days, while the remaining 10% will be retained. Correspondingly, China will rescind a total of 91% of the counter-tariffs imposed on US goods. For the 34% counter-tariffs imposed in response to US reciprocal tariffs, the imposition of 24% of the tariffs will be suspended for 90 days, while the remaining 10% will be retained. China will also suspend or rescind non-tariff countermeasures against the US accordingly. Upon the release of this news, global financial markets immediately became volatile. The Hong Kong stock market surged significantly, US stock index futures also rose rapidly, while gold prices fell sharply. In the foreign exchange market, the US dollar index surged, and the offshore RMB also strengthened significantly against the US dollar. Global assets responded swiftly. After the joint statement on the US-China Geneva Economic and Trade Talks was issued at 15:00 Beijing time, the gains in the Hong Kong stock market expanded rapidly. By the close of trading, the Hang Seng Index closed up 2.98%, and the Hang Seng Tech Index soared 5.16%, with Sunny Optical Technology, BYD Electronic, XPeng Motors, and others leading the gains. The US stock market was also in high spirits. As of press time, the S&P 500 index futures surged 2.51%, the Nasdaq 100 index futures soared 3.37%, and the Dow Jones index futures rose 1.89%. The VIX index futures, known as the "fear index," plunged 7.39%, indicating a significant easing of people's concerns. The price of gold, a safe-haven asset that had previously surged due to the US-China trade war, fell sharply. As of press time, gold futures fell 3.51% intraday to $3,226.49 per ounce, breaking below the previous low of the phase on May 1 and hitting a new low since April 14. As market sentiment eased, the US dollar rebounded significantly. As of press time, the US dollar index rose 1.26% intraday, hitting a new high since April 10. The offshore RMB also strengthened, rising 0.39% against the US dollar to 7.2108 RMB per US dollar as of press time. The yield on the 10-year US Treasury note rose by 1.44% during the day, hitting a new high since April 14. Market participants: Chinese stocks and the RMB are set to rise. Market participants and economists have given positive assessments of the joint statement issued at the China-US Geneva Economic and Trade Talks. ARNE PETIMEZAS, Research Director at AFS Group in Amsterdam, said, "The US has made such a dramatic 180-degree turn on the tariff issue, which is quite surprising... The market should rebound as a result ." WILLIAM XIN, Chairman of Shanghai Chunshan Pujiang Investment Management Co., Ltd., told the media, " The outcome far exceeded market expectations... Now, there is more certainty . Both the Chinese stock market and the RMB are set to rise over a period of time ."

The Chinese and US governments issued a joint statement on Monday, agreeing to temporarily modify and eliminate additional tariffs imposed on each other's goods. Within 90 days, the reciprocal tariff rates between the two countries will be reduced to 10%. This statement significantly boosted confidence in global capital markets, with Asian and European stock markets, as well as US stock index futures, all rising on Monday. Meanwhile, as tariff disputes ease, market expectations are that the global economy is likely to continue growing amid the resumption of normal trade between China and the US. This has also driven stronger oil demand, thereby benefiting oil prices. As of press time, Brent crude oil futures prices rose by 2.74%, and WTI crude oil futures prices rose by 2.72%. However, the sustainability of the rebound in crude oil prices remains to be verified. Gao Jian, a crude oil researcher at Qisheng Futures, previously told the media that it is uncertain whether the tariff issue can be fundamentally resolved and whether tensions can be eased. Unless there are more tangible and favorable developments in macro, fundamental, or geopolitical aspects, the scope for further rebounds in oil prices will be limited. Toshitaka Tazawa, an analyst at Fujitomi Securities, had also previously warned that optimism over constructive talks between China and the US has supported market sentiment, but OPEC's production increase plans may limit gains. Game Theory OPEC plans to accelerate production increases from May to June to supply more crude oil to the global market. Meanwhile, the US and Iran will continue negotiations on the nuclear program, which will also reinforce market perceptions that global oil supplies will remain stable. On the other hand, US President Trump also seeks to continue lowering oil prices to fulfill his campaign promise of reducing energy costs. These macro factors collectively exert pressure on oil prices, leading analysts to believe that oil prices will remain low until 2026. Goldman Sachs earlier projected that for the remainder of 2025, the average price of Brent crude oil will remain at $60 per barrel, with WTI crude oil averaging $56 per barrel. In 2026, Brent crude oil will further decline to $56 per barrel, and WTI will fall to $52 per barrel. Starting from Monday this week, Trump will also make his first visit to the Middle East, conducting state visits to Saudi Arabia, the UAE, and Qatar. Some commentators have pointed out that low oil prices are, to some extent, a gesture of goodwill from the Middle East towards Trump. For example, Saudi Arabia hopes to attract more US investment to support its Vision 2030 plan. Trump also hopes to receive more capital inflows from Gulf countries. However, Karen Young, a senior fellow at the Center on Global Energy Policy at Columbia University, stated that Gulf countries have higher import values than export values. If they cannot increase export revenues, they will have to sell domestic assets to cover fiscal and current account deficits. This means that low oil prices are not a sustainable policy for the Gulf countries. Tim Callen, a visiting scholar at the Arab Gulf States Institute in Washington, added that if oil prices continue to fall, it is less likely that the Gulf countries will fulfill their investment commitments to the United States. This, in turn, forces Trump to consider the possibility of rising oil prices. Given that attracting large-scale investment funds from the Middle East to the United States could be seen as a victory for the White House's economic agenda, Trump's trip to the Middle East will be crucial for the future direction of global oil prices.

China and the US held high-level economic and trade talks in Geneva, Switzerland, over the weekend. According to He Lifeng, the Chinese lead negotiator and Vice Premier of the State Council, on the evening of the 11th, the talks were frank, in-depth, and constructive, with important consensus reached and substantive progress made. US Treasury Secretary Scott Bessent also stated that substantial progress had been made in trade negotiations with China. Both sides' statements are undoubtedly crucial for easing international trade disputes and have ignited market optimism about getting back on track. On Monday, Wall Street stock index futures all rose. As of press time, S&P 500 index futures were up 1.35%, Dow Jones futures contracts were up 1.05%, and Nasdaq index futures were up 1.83%. Asian stock markets also showed signs of warming up. The Nikkei 225 index opened up 0.53%, the South Korean KOSPI index was up 0.7%, the FTSE China A50 index futures opened higher after a 0.04% decline in the night session of the previous trading day, the Hang Seng index rose more than 1%, and the three major A-share indices all opened sharply higher, with the ChiNext index up 1.4%. The US dollar also strengthened against safe-haven currencies in the Asian morning session. As of press time, the US dollar index had risen by 0.21%. The US dollar-Japanese yen exchange rate was up 0.42%, and the euro-US dollar exchange rate was down 0.11%. Inflationary Effects Michael Brown, Senior Research Strategist at Pepperstone, said that China and the US now seem to have a broad negotiating framework under which the two countries may conduct further negotiations with the aim of reaching a broader trade agreement. This is much better than the worst-case scenario expected by the market. Chris Weston, Head of Research at Pepperstone, pointed out that early signs in interbank foreign exchange trading favored US dollar bulls, especially against the Swiss franc, yen, and euro. The market will greet the US core CPI and retail sales data against the backdrop of a stronger US dollar. Although both China and the US have adopted positive attitudes, some analysts believe that Trump's erratic trade stance means he is unlikely to abandon tariffs, and the specific impact of tariffs will be initially reflected in the April consumer price data to be released this week. US retail sales in April may see a pullback, but analysts at ANZ expect that the market will not see widespread evidence of tariffs showing up in inflation data until the May CPI data is released. However, Monday's US stock market performance was almost crystal clear to many investors. Dave Portnoy, the billionaire founder of Barstool, posted that the stock market would turn into a movie on Monday. He also included three rocket emojis, predicting a rising market. Portnoy strongly supported Trump during the 2024 election, but later joined the ranks of those criticizing Trump over tariff issues. He once stated that due to Trump's tariff decisions, his net worth had decreased by 20%.