Published: Jul 11, 2026 at 08:00 The price of Gold has recovered from June's sharp sell-off, and HSBC believes the precious metal can continue to rebound even as a hawkish Federal Reserve keeps US yields elevated. The Gold price in US Dollars (XAU/USD) traded near $4,165 on Friday, up almost 1% on the day after rebounding more than 3% since the start of July. The recovery follows an almost 12% decline in June, when prices briefly slipped below $4,000. Image: Gold price in US Dollars - 2 day chart HSBC says the stronger US Dollar and higher real interest rates remain near-term headwinds, but argues that the recent correction has already priced in much of the Federal Reserve's hawkish shift. The bank believes gold's longer-term fundamentals remain favourable despite the tougher macro backdrop, pointing to continued central-bank demand, geopolitical uncertainty and concerns over rising government debt. HSBC argues that even if the Fed keeps interest rates higher for longer, structural demand should continue to underpin bullion. Image: XAU/USD 6 month historical chart The bank also expects official-sector buying to remain an important source of support, while investors are likely to rebuild positions once confidence grows that US yields have peaked. Although HSBC acknowledges further volatility is likely in the near term, it believes gold should continue to "shine through" the current hawkish environment rather than enter a prolonged bear market. Source： https://www.exchangerates.org.uk/news/46470/2026-07-11-gold-price-forecast-2026-hsbc-says-bullion-can-shine-despite-hawkish-fed.html

SMM, July 13 – Metals Market: In overnight trading last Friday, base metals on both domestic and overseas markets showed mixed performance. LME aluminum led the declines with a 2.07% drop, while SHFE nickel led the gains with a 0.78% rise. The remaining metals all had changes within 1%. The main alumina contract fell 0.4%, and the main cast aluminum contract fell 0.78%. In overnight trading last Friday, ferrous metals fell except for stainless steel and iron ore. Stainless steel rose 0.03%, and iron ore rose 0.27%. Hot-rolled coil and rebar both edged down. For coking coal and coke, coking coal fell 1.03%, and coke fell 1.15%. In overnight trading last Friday, for precious metals, COMEX gold fell 0.29%, with a weekly edge up of 0.08%. COMEX silver fell 0.74%, with a weekly decline of 1.25%. Domestically, SHFE gold fell 0.56%, with a weekly decline of 0.83%, and SHFE silver fell 0.58%, with a weekly decline of 2.63%. HSBC lowered its average gold price forecasts for 2026 and 2027, citing expectations of a hawkish turn in Fed monetary policy and a stronger US dollar that continues to pressure gold prices. The bank cut its 2026 average price forecast from $4,864 per ounce to $4,560, and its 2027 forecast from $5,000 to $4,925. HSBC expects gold prices to fluctuate in a range of $3,800 to $4,700 for the rest of 2026, ending the year near $4,750. (Wall Street CN) As of 7:17 on July 11, last Friday’s overnight closing prices: Macro Front Domestically: [State Council Executive Meeting: Promote the Scaled Development of Emerging Pillar Industries Across the Entire Chain, Strengthen Basic Research and Key Software and Hardware Breakthroughs] According to CCTV, Li Qiang chaired a State Council executive meeting that studied work related to cultivating emerging pillar industries. The meeting pointed out the need to promote the scaled development of emerging pillar industries across the entire chain, strengthen basic research and breakthroughs in key software and hardware, and accelerate technological iteration and ecosystem improvement. It also highlighted the need to optimize regulatory models and guide localities to develop according to their own conditions and in differentiated ways. (Jinshi Data APP) [Ministry of Commerce, General Administration of Customs: Implement Temporary Export Ban Management on Helium] The Ministry of Commerce and the General Administration of Customs issued an announcement, stating that in accordance with relevant provisions of the Foreign Trade Law of the People’s Republic of China, they have decided to implement temporary export ban management on helium (Customs commodity code: 2804290010). This announcement takes effect from the date of issuance, and subsequent adjustments will be announced separately. (Jinshi Data APP) [National Electricity Load Hits a Record High of 1.518 Billion kW] Since the beginning of this year, the national economy has continued to develop towards new and better directions, with end-user electrification levels steadily rising. Combined with recent high temperatures in many parts of the country, electricity loads have rapidly climbed. On July 10, China’s nationwide electricity load hit a record high for the first time this year, peaking at 1.518 billion kW, an increase of 10 million kW from the historical extreme. Since the start of summer, the south China regional power grid and multiple provincial grids, including Guangdong, Guangxi, Hainan, Ningxia, Gansu, Fujian and Shaanxi, have set new record highs in electricity load more than 20 times cumulatively. The repeated record highs in electricity demand this year were driven primarily by three factors: First, steady growth in industrial electricity consumption. High-tech manufacturing and high-end equipment manufacturing are booming, and electricity use by emerging industries such as NEVs, energy storage and computing equipment continues to expand. Second, relatively rapid growth in service sector electricity consumption. Since the beginning of this year, the YoY growth rate of electricity consumption in the battery swapping and charging service industry and the internet data service industry has both exceeded 40%. Third, high temperatures have pushed up electricity loads. As residents’ living standards continue to improve, the proportion of air-conditioning cooling load in the national total is approaching 30%, and in some provinces it exceeds 40%. (National Development and Reform Commission (NDRC)) [National Energy Administration: The share of non-fossil energy consumption will increase by an average of about 1 percentage point per annum by 2028] The National Energy Administration issued the “Energy Sector Energy Conservation and Carbon Reduction Action Plan (2026–2028).” The plan proposes that, by 2028, the share of non-fossil energy consumption will increase by an average of about 1 percentage point per annum; the coal consumption rate of coal-fired power units will be reasonably controlled, and the proportion of coal-fired capacity achieving the current energy efficiency benchmark level will strive to increase by 15 percentage points; a number of zero-carbon and low-carbon coal mining areas and oil regions will be established; support will be given to establishing a number of zero-carbon industrial parks, with significant progress made in energy conservation and carbon reduction in key industries and continuously improved levels of green energy use. The plan proposes vigorously promoting energy saving and carbon reduction in thermal power. It will steadily and orderly shut down a batch of coal-fired power units of 300,000 kW class and below where conditions permit, while encouraging the construction of replacement units meeting next-generation coal power standards; promote the implementation of a number of supercritical/ultra-supercritical cross-generational upgrades and retrofits for 600,000 kW class coal-fired units. Support will be given to implementing zero-carbon and low-carbon fuel co-firing and carbon capture, utilization and storage (CCUS) retrofit construction for units where conditions allow, with carbon emission levels per kWh after retrofitting expected to be reduced by about 10%. It will implement a batch of coal power, gas power and new energy integration projects, supporting coal power and new energy in achieving integrated carbon reduction effects through methods such as coupled peak shaving and peak supply via thermal storage and energy storage, and integrated collection and transmission. (Jin10 Data App) US dollar side: Overnight last Friday, the US dollar index edged up 0.03% to 100.96, posting a weekly gain of 0.05%. The Fed’s semi-annual report showed that in 2026, US economic activity maintained robust expansion overall, primarily driven by high-tech investment and government spending. Factory output grew strongly due to AI-related data center investments, and production capacity continued to improve. However, the housing market stalled, and the external economy was weighed down by the Middle East conflict and tariffs, resulting in sluggish growth. The labour market was generally stable, with both wages and productivity increasing, but slowing immigration led to a decline in labour supply, while small businesses and households still faced relatively tight credit conditions. Inflation remained elevated and firmed further in spring, with asset prices above historical norms. The financial system was resilient overall, with ample bank reserves, and the private credit market continued to function normally despite some redemption pressures. Long-term inflation expectations remained well anchored near the 2% target, although the uncertainty brought by the Iran conflict was a primary risk. (Jin10 Data App) The report noted that the Fed’s preferred Personal Consumption Expenditures (PCE) price index remained about twice the 2% target as of this May. This was also the first monetary policy report released since the new Fed Chairman Warsh took office. Warsh will testify before the House and Senate committees on Tuesday and Wednesday this week respectively, undergoing routine mid-year review on monetary policy. (Wall Street CN) According to CME “Fed Watch”: The probability of the Fed keeping rates unchanged in July is 66.3%, and the probability of a cumulative 25 basis point rate hike is 33.7%. The probability of the Fed keeping rates unchanged through September is 31.0%, the probability of a cumulative 25 basis point rate hike is 51.1%, and the probability of a cumulative 50 basis point rate hike is 18.0%. (Jin10 Data App) Other currencies: According to a Reuters report, three sources familiar with the Bank of Japan’s thinking said the BOJ plans to keep interest rates unchanged in July but will maintain its policy guidance, committing to continue pushing ahead with the rate hike process. One source said, “With oil prices falling, downside risks to the economy have diminished somewhat. But the high cost of past imports will continue to exert upward pressure on prices.” Two other sources expressed similar views. They also stated that the BOJ may raise its FY2026 economic growth forecast in its July quarterly report and will continue to watch for inflation overshoot risks, as cost increases from a weak yen and strong AI demand partially offset the impact of falling oil prices. (Jin10 Data App) ING economists Marieke Blom and Amrita Naik Nimbalkar said in a report that if the eurozone savings rate falls to pre-pandemic levels, it could unlock goods and services demand worth approximately 1% of GDP. In Q1 of this year, household savings stood at 14.3% of disposable income, higher than the pre-pandemic five-year average of 12.5%. In the US, the savings rate in the last quarter of 2025 was 10.2%, a level which could add nearly 2% to eurozone GDP. Consumption is expected to remain weak as higher mortgage rates, slowing credit growth and precautionary savings weigh on spending. However, they said a shift from bank deposits to investments could lay the foundation for stronger spending and domestic demand in the coming years. (Jin10 Data App) On the macro front: This week, China will release data including June trade balance in US dollar terms, June trade balance, June YoY exports and imports, Q2 GDP YoY, June total retail sales YoY, June industrial added value above designated size YoY, June nationwide electricity consumption YoY, and June nationwide electricity consumption. The US will release data including June unadjusted CPI YoY, June seasonally adjusted CPI MoM, June seasonally adjusted core CPI MoM, June unadjusted core CPI YoY, June PPI YoY, June PPI MoM, July NY Empire State manufacturing index, initial jobless claims for the week ending July 11, June retail sales MoM, July Philadelphia Fed manufacturing index, June NFIB small business optimism index, ADP employment change weekly for the week ending June 27, July NAHB housing market index, May business inventories MoM, June pending home sales index MoM, June annualized housing starts total, June building permits total, June import price index MoM, June industrial output MoM, July preliminary one-year inflation expectations, and July preliminary University of Michigan consumer sentiment index. The Eurozone will release data including May industrial output MoM, May seasonally adjusted trade balance, May seasonally adjusted current account, June final CPI YoY, and June final CPI MoM. The UK will release data including May three-month GDP MoM, May manufacturing output MoM, May seasonally adjusted goods trade balance, and May industrial output MoM. Data such as Canada’s May wholesale sales MoM and the Bank of Canada’s interest rate decision as of July 15 will also be released. In addition, the State Council Information Office will hold a press conference on H1 2026 import and export situation; the National Bureau of Statistics (NBS) will release the monthly report on residential sales prices in 70 large and medium-sized cities; the State Council Information Office will hold a press conference on national economic performance; the National Energy Administration will release nationwide electricity consumption data around the 15th of each month. China’s refined oil products will see a new pricing adjustment window open. Fed Governor Waller will speak; Fed Chairman Warsh will testify before the House Financial Services Committee at the hearing on the “Fed’s Semi-Annual Monetary Policy Report”; 2027 FOMC voter and Chicago Fed President Goolsbee will participate in a fireside chat; FOMC permanent voter and New York Fed President Williams will speak; Fed Chairman Warsh will testify before the Senate Committee on Banking, Housing and Urban Affairs at the hearing on the “Fed’s Semi-Annual Monetary Policy Report.” On July 16, the Fed will release the Beige Book on economic conditions; 2028 FOMC voter and St. Louis Fed President Musalem will speak; 2026 FOMC voter and Dallas Fed President Logan will speak; Fed Vice Chairman Jefferson will speak on the economy and monetary policy. Bank of England Governor Bailey will speak; the Bank of Canada will release its interest rate decision and monetary policy report, and BoC Governor Macklem and Senior Deputy Governor Rogers will hold a monetary policy press conference. Crude oil side: Overnight last Friday, oil prices on both benchmarks fell, with WTI crude down 0.79% and Brent crude down 1.42%. On a weekly basis, WTI crude rose 4.11% and Brent crude rose 4.3%, together ending a prior four-week losing streak. Markets are still pinning hopes on when the Strait of Hormuz will reopen for navigation. Notably, after the US and Iran conflict escalated this week, the weekly oil price shed its four-week losing streak, gaining over 4% for the week. According to CCTV News, on Friday, July 10, local time, US President Trump posted on his social media platform “Truth Social,” stating that Iran wanted to continue “negotiations” with the US, and the US had agreed to continue negotiations. Trump also said the US had clearly informed Iran that the ceasefire was over. Subsequently, Xinhua News Agency, citing US media reports, said a new round of US and Iran negotiations may be held in Switzerland this week. However, according to Iran’s Fars News Agency, sources close to the Iranian negotiating team said the claim that Iran and the US would hold a new round of talks this week was untrue. According to CCTV, Iranian Foreign Ministry spokesperson Baghaei said on Friday that Iran has never sought to negotiate with the US but agreed to a visit by mediators to Iran. (Wall Street CN) CCTV reporters learned from the Iranian side that Iranian Foreign Minister Araghchi will lead a diplomatic delegation to visit Oman on the 11th. During the visit, the two sides plan to engage in dialogue and exchange views on bilateral relations and the regional situation, especially the current conditions in the Strait of Hormuz. (CCTV) Data released on the 10th by international market services firm Kpler showed that on July 9, the number of vessels transiting the Strait of Hormuz area fell to 22 from 30 the previous day, marking the second consecutive day of declining strait traffic volume. Kpler said this data includes both commercial and non-commercial vessels, with commercial vessel traffic slightly higher than non-commercial. “The renewed escalation of US-Iran military confrontation has weakened market confidence that diplomatic efforts can bring stability to the situation in the near term.” (Xinhua News Agency) Barclays: Risks to the forecasts of $96/bbl and $85/bbl for Brent crude oil prices in 2026 and 2027 respectively are fairly balanced. This week, OPEC will release its monthly crude oil market report (specific release time of the monthly report is pending, typically published around 18-21 Beijing time).

July 6, 2026 Despite current headwinds from high U.S. yields and a strong dollar, HSBC believes the gold price still has further upside potential through the end of 2026. While the precious metal is currently trading within a narrow range in the short term—as higher real yields increase the opportunity cost of this non-interest-bearing asset—analysts remain extremely bullish on the long-term investment case. Short-Term Pressure: Raising Liquidity Rather Than a Safe Haven During the recent geopolitical crises in the Middle East and amid rising oil prices, gold behaved less like a traditional safe haven and, at times, moved in tandem with the stock market. In an environment marked by inflation concerns and falling stock markets, investors primarily used the precious metal as a highly liquid hedge. To quickly generate cash during tense market phases or to meet impending margin calls on other investments, gold positions were aggressively sold off. This development was accompanied by previously massively overextended positioning in the futures market. Driven in part by inexperienced speculators, a noticeable correction followed the rapid surge to around $5,400 per ounce at the end of January, as these often leveraged positions had to be hastily unwound. Also noteworthy for commodity investors is the profoundly altered market dynamic: The historical correlation between gold and oil, which was still strongly positive in the 1970s and 1980s, has since decoupled dramatically. Today, this correlation has weakened to a value of around 0.15 or even into negative territory, posing entirely new challenges for diversification in modern portfolios. Structural demand from Asia and ETF inflows provide support The gold price owes its solid foundation to the ongoing need for diversification among institutional investors. Global de-dollarization and geopolitical uncertainties, along with steady ETF inflows, are driving demand, particularly in Asia. On the Shanghai Gold Exchange, this is reflected in a significant price premium of around 20 U.S. dollars. The focus here is less on jewelry or coins and more on large-format bars for the institutional sector. Regulatory changes in China and India now allow large local insurers and asset managers to strategically build up gold positions. This robust demand is complemented by steady purchases by central banks, as underscored by the People’s Bank of China ’s recent acquisitions of an additional 8.1 metric tons. Source： https://goldinvest.de/en/gold-price-forecast-for-2026-why-the-precious-metal-holds-huge-potential-despite-headwinds

Published: Jul 04, 2026 - 2:01 AM (Kitco News) – Even as U.S. Treasury yields and a stronger dollar continue to limit gold’s upside, growing diversification demand, central bank buying and ETF inflows should support further price gains for the yellow metal by the end of 2026, according to HSBC. "Gold did not rally during the Middle East conflict and has largely moved in tandem with equities,” HSBC Global Chief Investment Officer Willem Sels and Global Head of Wealth Insights Lucia Ku wrote. “Our analysis indicates that US yields are the primary driver of gold prices. We believe gold may remain range-bound in the near term amid elevated real yields and a stronger USD. However, demand for portfolio diversification, central bank buying and steady ETF inflows should support gold prices over the medium term.” “We continue to view gold as an effective diversifier against broader portfolio risks." Sels and Ku said their analysis indicates that U.S. Treasury yields are currently acting as the primary driver of gold’s price action. “When yields rise, the opportunity cost of holding a non-yielding asset increases, putting pressure on gold prices,” they said. “Moreover, gold has been less effective as an equity hedge in 2026, having largely moved in tandem with equities.” HSBC believes gold will likely remain rangebound in the near term in the face of elevated real yields and a strong U.S. dollar. “However, demand for portfolio diversification, central bank purchases and steady ETF inflows continue to support our bullish view on gold and its role as a diversifier against broader portfolio risks,” they said. “We anticipate further upside for gold by year-end." On May 11, James Steel, Chief Precious Metals Analyst at HSBC, said that gold has performed exactly as it should throughout the Iran conflict . “The demand has been good out of China,” Steel said. “The Shanghai Gold Exchange premium – the difference between the domestic price in China and the global price – is around $20, indicating strong domestic demand in China, which is mostly on the institutional side. It's interesting; it's less on jewelry and coins and small bars, which we have seen traditionally, and more on the large bars, more for institutions, because we had some regulatory reform in both China and India. Now the top insurance companies in China are allowed to accumulate bullion, and asset managers in India are allowed to accumulate it as well.” “But in addition to that, we saw surprisingly strong buying in the latest data from the central bank, from the People's Bank of China, who bought 8.1 tonnes for the last month's data.” Steel was asked what he learned from gold’s peak around $5,400 per ounce in late January, and its subsequent decline amid the Middle East conflict. “Well, I think the run up was a little robust,” he said. “We were bringing in a lot of money that had not been in the market for quite some time, or had not traded gold at all. One could argue that the market had become overly long, particularly when you look at CFTC data and other things we have available now.” “There's been a lot of critics of the bullion market saying that the decline since the strikes on Iran and escalating oil prices, [claiming] that gold is not a safe haven, that it’s failed in some sense,” Steel said. “I would argue exactly the opposite, because as the oil went up and we got restoked inflationary fears, and bond yields rose, and the dollar rose, equities declined. In that atmosphere, ready cash was needed. And that's what gold provides you.” “We did see liquidation in the gold market, but mostly as a reaction to the financial market,” he added. “In a sense, gold was an insurance policy, and that insurance policy was being cashed in.” Steel was also questioned on his views of gold’s historical relationship with oil prices. “Well, that's interesting, because I'm old enough to remember when it was a positive relationship,” he replied. “We've done some work on this. In the 1970s, gold was positively correlated with oil: Oil ran up, and so did gold. In the 1980s, that was the same; oil fell and gold also fell.” “Now, that correlation seemed to break apart as we got into the 90s, as oil was a less significant part of the global economy,” he said. “That correlation is now only about 0.15, or even negative at times… It's negative at the moment.” Finally, Steel was asked whether he views gold as one of several alternative assets within investor portfolios, or whether he sees it as a standalone asset. “Well, I think you could argue that it is an alternative asset,” he said. “It’s certainly quite unique, in the sense that it's a hard asset and it's also highly liquid. It doesn't correlate to Apple or Nvidia, it tends not to, over the long run anyway. Things like Canadian farmland, for instance, that's also a hard asset, but you can't liquidate it quickly. And that's the beauty of gold. It's both a hard asset, and it's highly liquid, highly traded.” “But what you have touched on, and I think we will see it back again, is many asset managers who never before have included gold in their portfolio, are beginning to do that, because they're looking for alternatives.” And on April 2, Sels and Ku said that despite gold’s recent underperformance, the rise of cross-asset correlations makes the yellow metal more valuable than ever as a portfolio diversifier, and they remain bullish on gold’s long-term outlook . Sels and Ku reiterated their constructive outlook on gold over the next six months, and said the bank is maintaining its Overweight positioning. "Inflation concerns have also led to rate volatility and a repricing of monetary policy expectations,” they noted. “Policymakers are likely to maintain current interest rates for some time before easing later. We continue to seek quality yields from investment-grade credit and EM local currency bonds for income generation.” “However, as cross-asset correlations have increased, we use gold and alternative assets to enhance diversification,” Sels and Lu underlined. “Despite the recent pullback, we remain bullish on gold over the medium to long term due to its diversification benefits and safe-haven demand.” The analysts added that they still expect gold’s recent headwinds to be short-lived, as the underlying fundamentals remain supportive. “Gold continues to serve as a compelling portfolio diversifier amid geopolitical uncertainty and central bank buying,” they wrote. HSBC has held fast to their positive outlook for the yellow metal throughout the recent pullback. On March 30, analysts at HSBC Asset Management said gold is behaving more like a risk asset in 2026, selling off sharply amid heightened geopolitical tensions and a stronger dollar, but the de-dollarization trend still makes it a good long-term investment . "Moves in the gold price since the Iran conflict broke out have defied expectations,” the analysts wrote. “The conventional playbook assumed that mounting geopolitical tensions and economic uncertainty would naturally boost the yellow metal, mirroring last year’s ‘Liberation Day’ episode and sustaining a spectacular two-year rally.” Instead, the yellow metal has done the opposite, they noted, losing 15% to date in March. “A stronger US dollar has certainly been a headwind, deterring non-US buyers, while a hawkish repricing of interest rates has increased the opportunity cost of holding a non-yielding asset,” the analysts said. “Yet, gold withstood a similar surge in the greenback and rates throughout 2022, weakening this traditional thesis.” HSBC believes gold is actually behaving like a risk asset in 2026. “Ownership has shifted towards retail and other leveraged buyers, many of whom are forced to liquidate holdings in periods of market stress,” they noted. "There remains a decent long-term investment case for gold, particularly amid ongoing global de-dollarisation,” the analysts said. “However, the recent volatility offers a stark reminder: robust portfolio diversification demands a broad-based approach." Source： https://www.kitco.com/news/article/2026-07-03/we-anticipate-further-upside-gold-year-end-hsbcs-sels-and-ku

SMM July 1: Metals market: Overnight, base metals broadly rose in both domestic and overseas markets, with only LME lead, LME nickel, and SHFE lead declining—LME lead fell 1.08%, LME nickel fell 0.55%, and SHFE lead fell 0.47%. The rest of the metals all gained. LME tin and SHFE tin surged over 2%, with LME tin up 2.58% and SHFE tin up 2.25%. LME zinc and SHFE zinc rose over 1%, with LME zinc up 1.85% and SHFE zinc up 1.4%. Gains in the remaining metals were all within 1%. Alumina main contract fell 0.25%, while cast aluminum main contract rose 0.42%. Overnight in the ferrous metals sector, most prices rose except for stainless steel. Stainless steel gained 0.92%, while iron ore fell 0.27%. Declines in other metals were modest. For coking coal and coke, coking coal edged up 0.08% and coke fell 0.15%. Overnight in precious metals, COMEX gold fell 0.42%, at one point dipping to a low of $3,955.4/oz, while COMEX silver rose 0.7%. Domestically, SHFE gold gained 0.8% and SHFE silver surged 3.43%. As of 6:44 am July 1, overnight closing prices: Macro front Domestic side: [NBS: June manufacturing PMI at 50.3%, China’s economic sentiment rebounds somewhat] National Bureau of Statistics (NBS) data showed that the June manufacturing PMI was 50.3%, up 0.3 percentage point from the previous month, returning to expansion territory. By enterprise size, large enterprise PMI was 50.7%, down 0.4 ppt from May but still above the threshold; medium-sized enterprise PMI was 50.5%, up 1.9 ppts, above the threshold; small enterprise PMI was 48.2%, down 0.3 ppt, below the threshold. Among the five sub-indexes that make up the manufacturing PMI, the production index and new orders index were above the threshold, while the raw material inventory index, employment index, and supplier delivery time index were all below the threshold. Huo Lihui, Chief Statistician of the NBS Service Industry Survey Center, commented on China’s June 2026 PMIs. The non-manufacturing business activity index for June was 50.2%, up 0.1 ppt from May, indicating a modest rebound in non-manufacturing sentiment. The services sector expanded at a faster pace. The services business activity index was 50.4%, up 0.1 ppt, showing some improvement. By sector, business activity indexes for telecommunications, broadcasting, satellite transmission services, internet software and information technology services, monetary and financial services, and insurance were all in the high-expansion territory above 55.0%, with rapid growth in total business volume. Air transport and real estate continued to operate below the threshold. The services business activity expectations index stood at 56.0%, up 0.6 ppt from May, reflecting improved corporate expectations for market development. Construction activity showed some improvement. The construction business activity index was 49.0%, up 0.2 ppt, edging up slightly. The construction business activity expectations index was 51.1%, remaining in expansion. [MIIT and eight other departments: Promote integrated planning and synchronous construction of industrial internet infrastructure and computing infrastructure such as smart computing facilities and supercomputing facilities] The Ministry of Industry and Information Technology (MIIT) and eight other departments issued a notice on the “Implementation Opinions on Promoting High-Quality Development of the Industrial Internet.” It proposes to enhance computing support. Promote integrated planning and synchronous construction of industrial internet infrastructure and computing infrastructure such as smart computing facilities and supercomputing facilities. Explore building an industrial computing network system, strengthen the dynamic coordination of multi-level computing capabilities across end, edge, and cloud, and meet the computing, network, storage, and usage needs of various entities’ business development. Rely on the integrated computing network to strengthen computing interconnectivity, improve the matching supply of intelligent and edge computing power, enhance the ability to process and deeply refine massive heterogeneous data at high speed, and deeply empower scenarios such as industrial large-model training and real-time interaction in the industrial metaverse. (Jin10 Data APP) US dollar: As of the overnight close, the US dollar index rose 0.06% to 101.17. Federal funds rate futures traders are increasingly betting that the Fed could start raising rates as soon as July. This previously unthinkable move could be disrupted by a series of economic data. The probability of a rate hike at the July policy meeting remains low, with interest-rate swaps currently pricing in about 9 basis points of tightening, implying roughly a 36% chance of a 25bp hike. Nonetheless, that probability has risen markedly; before new Fed Chairman Kevin Warsh shifted his focus to price stability, the odds were nearly zero. (From Wallstreetcn app) On the data front, the Job Openings and Labor Turnover Survey (JOLTS) report released Tuesday by the Bureau of Labor Statistics showed job openings edged up in May, but the pace of new hires pulled back. Data showed that at the end of May, total job openings across the US rose by 9,000 from the prior month to 7.594 million, above economists’ forecast of 7.3 million. The April figure was revised down from an initially reported 7.618 million to 7.585 million. The increase in openings was mainly concentrated in professional and business services and very small businesses with fewer than ten employees. The job openings rate held steady at 4.6%. Hiring declined by 45,000 to 5.17 million, with the hiring rate stable at 3.3%. US job gains have accelerated sharply for three straight months, and the market had been optimistic that the labor market was returning to a recovery path after a soft patch in 2025. However, the strong payroll gains have been largely driven by a simultaneous decline in both layoffs and quits, rather than by a pickup in hiring by businesses. (Jin10 Data) HSBC said that a sharp rally in the US dollar could be one of the biggest “pain trades” in the second half of this year. The bank expects the dollar to strengthen gradually in the first half of 2027, and warned that if the Fed signals a stronger readiness to tighten policy than the market expects, and if geopolitical tensions flare up again, the dollar could see an “explosive” rally. Risks have increased since the Fed’s June meeting, when policymakers focused on inflation and offered little forward guidance. That shifted market attention back to interest-rate differentials and helped the dollar strengthen against major currencies over the past two weeks. “A stronger dollar will certainly cause pain, but we think the ‘pain trade’ in FX will be an explosive dollar rally,” analysts including Paul Mackel wrote in a June 29 note. (Bloomberg) According to CME FedWatch: The probability of the Fed holding rates unchanged in July is 66.3%, while the probability of a cumulative 25bp hike is 33.7%. For the September meeting, the probability of rates remaining unchanged is 33.1%, a cumulative 25bp hike stands at 50.0%, and a cumulative 50bp hike at 16.9%. (Jin10 Data APP) Macro side: Today will see the release of China’s June RatingDog manufacturing PMI, US June Challenger job cuts, US June ADP employment change, final reading of US June S&P Global manufacturing PMI, US June ISM manufacturing PMI, US May construction spending m/m, UK June Nationwide house price index m/m, final UK June manufacturing PMI, Switzerland May real retail sales y/y, final French June manufacturing PMI, final German June manufacturing PMI, final Eurozone June manufacturing PMI, preliminary Eurozone June CPI y/y, and preliminary Eurozone June CPI m/m. In addition, Fed Chairman Kevin Warsh, ECB President Christine Lagarde, Bank of England Governor Andrew Bailey, and Bank of Canada Governor Tiff Macklem will speak at the “Policy Panel” event at the ECB Global Central Bank Forum. The Davos Tech Summit will be held July 1-4, with the theme “Physical AI and Robotics.” It is noteworthy that on July 1, the Hong Kong Exchange is closed for Hong Kong Special Administrative Region Establishment Day, with Southbound and Northbound trading shut. The Toronto Stock Exchange in Canada is closed for Canada Day. Crude oil: Overnight, oil prices fell in both markets, with US oil down 1.02% and Brent down 0.65%. The US Energy Information Administration (EIA) reported in its monthly data released Tuesday that US crude oil production climbed to a record 13.93 million barrels per day in April, driven by the Iran war boosting oil prices and producers ramping up output. EIA data showed that output increased by 216,000 bpd in April, with New Mexico hitting a record 2.37 million bpd. Texas crude production edged up 36,000 bpd to 5.83 million bpd, the highest since last November. Texas and New Mexico share the Permian Basin, which accounts for about half of total US crude output. The third-largest producing state, North Dakota, saw output rise to 1.13 million bpd, also the highest since last November. (From Wallstreetcn app) American Petroleum Institute (API) data showed that last week, US API crude inventories fell by 6.072 million barrels, after a 765,000-barrel draw the prior week. API Cushing crude inventories rose by 503,000 barrels, compared with a draw of 982,000 barrels the previous week. API gasoline inventories fell by 2.106 million barrels (vs. a build of 1.238 million barrels the prior week), while distillate inventories rose by 2.922 million barrels (vs. a build of 1.447 million barrels the prior week). (From Wallstreetcn app) Russia’s crude oil exports are surging to record highs, causing a buildup of crude at sea, while the price of crude, Moscow’s main source of revenue, is falling sharply. According to tanker tracking data compiled by Bloomberg, Russia’s average daily seaborne crude exports rose to 4.13 million barrels in the four weeks through June 28. That is the highest since the Russia-Ukraine conflict erupted in 2022; before the conflict, a large portion of Russian oil was sent to Western Europe via pipelines. The export surge means Russian oil inventories at sea have increased by about a third since mid-April lows, and cargoes are starting to accumulate off the coast of Egypt and Singapore, suggesting Moscow may face increasing difficulty in placing all its volumes. The rise in exports comes as Ukraine continues to attack Russian refineries, which may force crude that cannot be processed domestically to be exported. (Jin10 Data APP)

SMM, June 15: Metal markets: Last Friday’s overnight session saw broad gains across base metals in and outside China, with only LME nickel edging down 0.03%. SHFE tin led the gains, rising 2.19%. LME copper, LME zinc, LME tin and SHFE zinc all gained over 1%: LME copper rose 1.02%, LME zinc rose 1.63%, LME tin rose 1.75% and SHFE zinc rose 1.48%, while the rest of the metals gained less than 1%. In addition, the alumina main contract rose 0.86% and the foundry aluminum main contract rose 0.45%. Last Friday’s overnight session for ferrous metals saw rises across the board except for iron ore, which fell 0.13%. Rebar rose 0.44% and HRC rose 0.59%. On the coking coal and coke front, coking coal rose 0.22% and coke rose 2.73%. Last Friday’s overnight session saw precious metals rebound collectively. COMEX gold rose 3.06% and COMEX silver rose 6.44%. However, due to notable earlier declines, COMEX gold still recorded a weekly loss of 2.87%, marking its second consecutive weekly drop. COMEX silver recorded a weekly loss of 1.42%, marking its fifth consecutive weekly drop. Domestically, SHFE gold rose 2.30% and SHFE silver rose 5.22%. SHFE gold posted a weekly loss of 6.79%, also marking its fifth consecutive weekly drop. SHFE silver plummeted 10.14% for the week, also marking a five-week losing streak. Bank of China issued an announcement, stating that global geopolitics and the US Fed's monetary policy are currently subject to considerable uncertainty. Under the influence of multiple factors, price fluctuations of precious metals in and outside China have further intensified. To protect the interests of clients involved in precious metals-related businesses—such as accumulated gold, accumulated interest gold, account precious metals, two-way account precious metals, and agency services for individual Shanghai Gold Exchange operations—the bank specifically reminds you to guard against market risks, engage in rational investment based on your own financial situation and risk tolerance, reasonably control your precious metals positions, mitigate the impact of short-term price fluctuations through long-term investment, and prevent the risk of capital losses caused by market volatility. As of 8:31 a.m. on June 13, the closing prices from last Friday’s overnight session are as follows: Macro front Domestic front: [PBoC: In the first five months, aggregate social financing rose by 1.748 trillion yuan; new loans stood at 911 billion yuan; May M2 increased 8.6% YoY] PBoC’s preliminary statistics show that the cumulative increase in the aggregate social financing scale for the first five months of 2026 was 17.48 trillion yuan, 1.16 trillion yuan less than the same period last year. Specifically, RMB loans extended to the real economy rose by 9 trillion yuan, a YoY decline of 1.38 trillion yuan; foreign currency loans extended to the real economy, converted into RMB, rose by 115.3 billion yuan, a YoY increase of 211.6 billion yuan; entrusted loans decreased by 103.1 billion yuan, a YoY increase in decline of 91.8 billion yuan; trust loans rose by 5.7 billion yuan, a YoY decline in growth of 57 billion yuan; undiscounted bankers’ acceptances decreased by 17.2 billion yuan, a YoY increase in decline of 151.4 billion yuan; net financing from corporate bonds was 1.67 trillion yuan, a YoY increase of 757.7 billion yuan; net financing from government bonds was 5.67 trillion yuan, a YoY decrease of 634 billion yuan; and domestic stock financing by non-financial enterprises was 230.5 billion yuan, a YoY increase of 79.9 billion yuan. In the first five months, RMB loans increased by 9.11 trillion yuan. By sector, household loans decreased by 631.4 billion yuan, of which short-term loans fell by 694.2 billion yuan and medium and long-term loans rose by 62.8 billion yuan; loans to enterprises and public institutions grew by 9.63 trillion yuan, with short-term loans up 3.77 trillion yuan, medium and long-term loans up 4.99 trillion yuan, and bill financing up 699.9 billion yuan; loans to non-bank financial institutions decreased by 279.7 billion yuan. PBOC data showed that at end-May, broad money (M2) stood at 353.67 trillion yuan, up 8.6% YoY. Narrow money (M1) totaled 114.89 trillion yuan, up 5.5% YoY. Currency in circulation (M0) reached 14.69 trillion yuan, up 11.9% YoY. Net cash injection in the first five months was 590.7 billion yuan. According to the PBOC website, to maintain ample banking system liquidity, on June 15, 2026, the People’s Bank of China will conduct a 600 billion yuan outright reverse repo operation through fixed-quantity, rate-based tender and multiple-price bidding, with a tenor of 6 months (183 days), maturing on December 15, 2026. US dollar: As of the overnight close last Friday, the US dollar index edged up 0.1% to 99.79, posting a weekly decline of 0.28%, with markets closely watching US-Iran peace talks. Multiple US media reported on the 12th that a senior US administration official said that day the US side is “80% to 85%” confident of signing a memorandum of understanding (MoU) with Iran within the coming days. The official also expressed confidence that Israel would support this US-Iran MoU. According to CNN, CBS and others, the official said on a press conference call, “We are not yet fully at the finish line, but we are very close.” The official noted that the specific venue and date for signing the MoU have not been determined, but US President Trump previously suggested signing it in a European country, which could be an option. (Xinhua) Iranian media reported on the 12th that Foreign Minister Abbas Araghchi stated that once the final stage of negotiations between Iran and the US is completed, the MoU will be signed and announced immediately. The first stage will be signed electronically remotely, “possibly within the next few days.” (Xinhua) HSBC analysts noted in a report that the US dollar exchange rate is currently below levels implied by market expectations for US interest rates. They said the dollar’s reaction has been relatively limited as market expectations recently shifted from anticipated rate cuts to potential rate hikes. They believe this may reflect loose financial conditions in the US and hopes for a resolution to the Middle East conflict. They stated that the dollar requires clear stimulus from monetary policy. If the US Fed fails to support rate hike expectations at this week's meeting, the dollar "could be in trouble." (Jin10 Data App) Traders expect the Fed to keep rates unchanged at 3.5%–3.75%, but see a more than 50% probability of a hike before year-end. Market pricing dialed back slightly after Thursday’s comments from Trump on a potential deal. In other currencies: ING analyst Chris Turner noted that for the EUR/USD exchange rate, the Fed’s upcoming policy meeting may matter more than the ECB’s Thursday rate hike decision. The ECB has signaled further tightening, with markets speculating about another hike in July. However, he stated that because the market has already priced in an aggressive ECB tightening cycle and is reluctant to push that expectation higher, EUR/USD remains below 1.16. Moreover, markets see a possible Fed hike later this year. He indicated that unless the Fed pushes back against this expectation at its Wednesday meeting, the dollar should stay firm. (Jin10 Data App) On the data front: This week, from China, the data to be released include China’s May total retail sales of consumer goods YoY, May industrial value-added above designated size YoY, May share of Swift RMB in global payments, May total electricity consumption YoY (TBD), and May total electricity consumption (TBD). From the US, releases will include the US Fed interest rate decision (upper bound) as of June 17, June NY Empire State manufacturing index, May industrial production MoM, June NAHB housing market index, weekly change in ADP employment as of May 30, May housing starts annualized, May building permits total, May import price index MoM, May retail sales MoM, April business inventories MoM, May pending home sales index MoM, initial jobless claims for the week ending June 13, June Philadelphia Fed manufacturing index, and May Conference Board leading index MoM. From the UK, releases will include May CPI MoM, May retail price index MoM, April three-month ILO unemployment rate, May unemployment rate, May claimant count change, Bank of England rate decision as of June 18, June GfK consumer confidence index, and May seasonally adjusted retail sales MoM. From the eurozone, releases will include April seasonally adjusted trade balance, April industrial production MoM, June ZEW economic sentiment index, May final CPI YoY, May final CPI MoM, and April seasonally adjusted current account. From Switzerland, releases will include the May consumer confidence index, May trade balance, and Swiss National Bank policy rate as of June 18. From Japan, releases will include the Bank of Japan target rate as of June 16 and May core CPI YoY. From Canada, releases will include April wholesale sales MoM and April retail sales MoM. Germany’s June ZEW economic sentiment index, Germany’s May PPI MoM, and the Reserve Bank of Australia rate decision as of June 16 will also be published. Additionally, on June 15, China will see the maturity of 218.5 billion yuan in 7-day reverse repos and 600 billion yuan in six-month outright reverse repos, the National Energy Administration is set to release data on nationwide electricity consumption around the 15th of each month, the National Bureau of Statistics (NBS) will publish the monthly report on residential selling prices in 70 large and medium-sized cities, and the State Council Information Office will hold a press conference on economic performance. The China Academy of Information and Communications Technology (CAICT) will convene a seminar to launch the High-Quality Token Service Capability Climbing Plan (tentative), and China's refined oil products will enter a new pricing window. On June 18, the US Fed's FOMC will release its interest rate decision and summary of economic projections, and Fed Chairman Warsh will hold a monetary policy press conference. ECB President Lagarde will deliver a speech. BOJ Deputy Governor Uchida Shinichi will hold a monetary policy press conference, and the BOJ will announce its interest rate decision. RBA Governor Block will hold a monetary policy press conference. The Swiss National Bank will announce its interest rate decision, and the Bank of England will announce its interest rate decision and minutes. The G7 Summit will open, running until June 17. In the Crude Oil Market: Last Friday, oil prices fell overnight in both markets, with US crude dropping 3.9% and Brent crude dropping 3.96%. Expectations for a US-Iran peace agreement continued to rise, putting oil prices under pressure and pulling them back. On a weekly basis, oil prices also declined, with US crude down 6.9% and Brent crude down 6.76%. In early trading in the US stock market, according to CCTV, Iranian Foreign Minister Abbas Araghchi said the Islamabad memorandum of understanding has never been this close to being reached, causing oil prices to plunge and US stock indices to extend intraday gains. Iranian Foreign Ministry Spokesperson Baghaei stated that the two sides have now reached an understanding on most issues, and Iran is in the final stages of consolidating the MOU text. At midday in the US stock market, CCTV reported that Pakistani Prime Minister Sharif Shehbaz said the final agreed peace agreement text has been completed, and the two countries are moving forward to implement the next steps. Oil prices continued to decline. During the session, US stocks briefly fell after Trump criticized Iran for leaking agreement terms, but then Wall Street News mentioned that the UAE has agreed to unlock large-scale funds to Iran, with the first tranche of about $3 billion already transferred, further boosting optimism about reaching an agreement. (Wall Street News) US Energy Secretary Wright stated that currently about 7 million barrels of oil and fuel pass through the Strait of Hormuz each day, a volume that accounts for about half of the stranded cargo when the Iran conflict first erupted. Wright said that no Iranian crude can currently be shipped through the Strait of Hormuz. He added that if an agreement is reached, he expects all products will be able to pass freely through the Persian Gulf. Wright also noted that if no agreement is reached, the US military will resume transportation along the route. Wright stated that the US will not impose an oil export ban to curb oil prices. (Jinshi Data APP) US Energy Secretary Wright stated on Friday local time that US refiners can still absorb more Venezuelan crude oil. Wright said that Venezuela currently sends about half of its total exports of 1.2 million barrels per day to the US, and this proportion could rise in the coming months. Wright also said that Iran is currently not exporting any oil or refined products. During the Middle East conflict, the US has actively filled the gap in oil exports. (Jinshi Data APP) Triggered by the most severe supply disruption on record from the Iran conflict, US emergency stockpile crude exports have surged to an all-time high. Customs data compiled by Kpler Ltd. show that nearly 22 million barrels of crude from the US Strategic Petroleum Reserve (SPR) have been sold to overseas markets so far this year. This volume has already surpassed the previous record set four years ago. Although exports of crude from the US emergency stockpile are not uncommon, the scale of shipments this year shows that, as the near-closure of the Strait of Hormuz triggers supply disruptions, global markets are increasingly relying on US supplies to weather the crisis. For every three barrels of crude released from the emergency stockpile, roughly one barrel is exported. The volume headed overseas could be even higher, as the Trump administration continues to release the full promised 172 million barrels of crude. This is part of a larger effort by the International Energy Agency (IEA) to help buffer the impact of the Iran war on global energy markets. (Wallstreetcn)

May 17, 2026 HSBC has increased its silver price forecasts for both 2026 and 2027, although the bank continues to expect limited upside for the precious metal over the medium term. HSBC now projects silver will average $75 per troy ounce in 2026 and $68 per ounce in 2027, compared with previous forecasts of $68.25 and $57, respectively. Silver Rally Fueled by Safe-Haven Demand and Tight Supply Silver surged to a record nominal high of $121 per ounce in late January, supported by soaring gold prices, constrained supply conditions and strong safe-haven demand linked to tariff concerns and geopolitical tensions. The metal later pulled back sharply to around $64 per ounce in early February following a conflict-driven rise in the U.S. dollar and weakness in gold prices, before recovering to trade above $86 per ounce. HSBC Sees Smaller Supply Deficits Ahead Despite raising its price outlook, HSBC maintained a cautious stance, arguing that shrinking supply deficits and softer industrial and jewellery demand are likely to prevent sustained gains. The bank expects the global silver market deficit to narrow to 73 million ounces in 2026 from 143 million ounces in 2025, before tightening further to 25 million ounces in 2027 as mine production and recycling supply increase. “Moderating deficits, in our view, will not be sufficient to propel silver sharply higher for prolonged periods,” said James Steel, chief precious metals analyst at HSBC. The bank expects prices to weaken during the second half of both 2026 and 2027. Industrial and Jewellery Demand Expected to Ease Industrial demand, which accounts for more than half of global silver consumption, declined to 657 million ounces in 2025 from a record 679 million ounces the previous year. HSBC said manufacturers have increasingly sought to reduce or substitute silver usage in response to elevated prices, and the bank expects that trend to continue. The bank forecasts industrial silver demand will decline further to 642 million ounces in 2026 and 618 million ounces in 2027. Jewellery demand is also projected to fall to 157 million ounces this year from 189 million ounces in 2025. Supply Growth Seen Supporting Market Rebalancing On the supply side, HSBC expects mine production to remain broadly unchanged at 848 million ounces in 2026 before rising to 868 million ounces in 2027. Recycling supply is forecast to increase to 216 million ounces this year from 197 million ounces in 2025. Dollar Weakness and Geopolitics Could Offer Support James Steel said expectations for a weaker U.S. dollar and ongoing geopolitical uncertainty could continue to provide some support for silver prices. However, he cautioned that “the gold:silver ratio is likely to widen, allowing silver to ease even if gold rallies.” HSBC set year-end silver price targets of $70 per ounce for 2026 and $65 per ounce for 2027. Source: https://www.msn.com/en-us/money/savingandinvesting/hsbc-raises-silver-forecasts-for-2026-and-2027-but-warns-upside-may-be-limited

Gold has been pulled in two directions in recent weeks. On one side, rising oil prices and escalating geopolitical tensions have strengthened the metal’s safe-haven appeal.

Although recent conflicts in the Middle East have caused short-term volatility in gold prices, the medium- and long-term outlook remains positive as high geopolitical risks, increasing fiscal deficits, and continued buying by central banks will continue to support the price of the precious metal.

SMM April 29: Metals market: Overnight, domestic market base metals fell nearly across the board. SHFE copper fell 1.15%. SHFE aluminum fell 0.43%, SHFE lead rose 0.18%. SHFE zinc fell 0.4%. SHFE tin fell 0.52%. SHFE nickel rose 1.7%. In addition, the most-traded alumina futures fell 1.08%, and the most-traded casting aluminum futures fell 0.8%. Overnight, ferrous metals mostly fell. Iron ore fell 0.06%, stainless steel edged up slightly, rebar fell 0.28%, and hot-rolled coil fell 0.3%. Coking coal and coke: coking coal fell 0.59%, coke fell 0.44%. Overnight overseas market metals, LME base metals generally fell. LME copper fell 1.45%. LME aluminum fell 0.95%, LME lead fell 0.61%. LME zinc fell 1.05%. LME tin fell 0.68%. LME nickel rose 1.52%. Overnight precious metals : COMEX gold fell 1.79%, COMEX silver fell 2.59%. Overnight SHFE gold fell 1.31%, SHFE silver fell 2.35%. As of 7:07 AM on April 29, overnight closing prices: Macro front China: [China to Implement Zero Tariffs on All African Countries with Diplomatic Relations Starting May 1, 2026] The Tariff Commission of the State Council issued an announcement that from May 1, 2026 to April 30, 2028, zero tariffs would be implemented in the form of preferential tax rates for 20 African countries that have established diplomatic relations with China but are not classified as least developed countries. For tariff-quota products, only the in-quota tariff rates would be reduced to zero, while out-of-quota tariff rates would remain unchanged. During the 2-year implementation period, China will continue to promote the negotiation and signing of common development economic partnership agreements with relevant African countries. [MIIT: Next Step Will Be to Launch "AI + Software" Special Action] Ke Jixin, Vice Minister of MIIT, stated at a State Council routine policy briefing on the 28th that MIIT will next promote the extension of producer services toward specialization and the high-end of the value chain, and accelerate innovation and development in the software and information technology services industry. In particular, regarding AI empowerment of the information services industry, MIIT will launch an "AI + Software" special action, accelerate R&D and application of intelligent programming, and foster new business models such as Model-as-a-Service and Agent-as-a-Service. MIIT will further strengthen open-source ecosystem development and promote intelligent upgrades of basic software and industrial software. US dollar: Overnight, the US dollar index rose 0.14%, closing at 98.63. This week is most likely the last monetary policy meeting chaired by Powell, and rates are expected to remain unchanged. The market's focus was on the policy statement wording and Powell's characterization of war-induced energy inflation at the press conference. (Wall Street Jianzhi) Former US Fed Vice Chairman and economist Roger Ferguson stated, "In terms of the dual mandate, the Fed will say the labour market is roughly in a stable state right now. On the inflation mandate, there is still a lot of work to do (as inflation remains elevated at 3%)." He expected the Fed to say: "We will stay put for now and see how this all plays out." Similarly, Goldman Sachs economist David Mericle expected the post-meeting statement to acknowledge improved employment market conditions and rising inflation data, but maintain existing policy guidance unchanged. We expect a majority will still support keeping rates unchanged, with only one dissent, same as in March. According to CME "FedWatch": the probability of the US Fed holding rates unchanged in April was 100%. The probability of a cumulative 25 basis point interest rate cut by June was 2.6%, while the probability of holding rates unchanged was 97.4%. (Jin Shi Data) John Luke Tyner, head of fixed income at Aptus Capital Advisors, stated in a report that this week's Fed meeting would provide clues as to which officials lean toward reacting to energy-related inflation and which view it as transitory. He said the meeting's mild tone, with no dot plot and most likely no policy action, "paves the way for a heated June," when Kevin Warsh will likely chair the meeting. Tyner noted that June will bring a new dot plot and more time to assess the Middle East situation and its impact on the economy and inflation. (Jin Shi Data) Other currencies: Eurozone consumers' inflation expectations rose across the board in March, a worrying signal for the ECB as it assesses the ripple effects of the Iran conflict. According to the ECB's monthly consumer survey released Tuesday, prices over the next 12 months were expected to rise 4%, up from 2.5% in February. Three-year inflation expectations rose from 2.5% to 3.0%, slightly below the 3.1% peak reached during the last price surge in October 2022. Five-year inflation expectations edged up from 2.3% to 2.4%, drifting further from the ECB's 2% medium-term inflation target. The ECB is closely monitoring whether elevated energy costs will prompt workers to demand pay raises and lead enterprises to raise selling prices. Second-round inflation effects beyond commodities such as gasoline could trigger rate hikes, although Thursday's policy meeting is expected to keep rates unchanged. (Wall Street Insights) On the macro front: Data to be released today include Australia's March non-seasonally adjusted CPI YoY, Switzerland's April ZEW Investor Confidence Index, Eurozone April Industrial Confidence Index, Eurozone April Economic Sentiment Index, Germany's preliminary April CPI MoM, US March annualized total housing starts, US March durable goods orders MoM, US March total building permits, and the Bank of Canada interest rate decision as of April 29. Also noteworthy: the Bank of Canada will release its interest rate decision and monetary policy report; the US Senate Banking Committee will vote on advancing Waller's nomination as Fed Chairman, and if passed, the full Senate will hold a confirmation vote; Bank of Canada Governor Macklem and Senior Deputy Governor Rogers will hold a monetary policy press conference. Crude oil: Overnight, both oil futures extended their rally, with WTI up 3.37% and Brent up 2.74%. Trump stated on social media that Iran had requested the US to lift its naval blockade on the critical shipping route and reopen it as soon as possible. Reports indicated that Pakistani mediators expected Tehran to submit a revised proposal within days. However, Trump subsequently expressed dissatisfaction with Iran's latest peace proposal, citing that it would delay nuclear negotiations, significantly dampening market expectations for a near-term resolution of the conflict. Iran claimed it could "outlast Trump," suggesting the situation could fall into a prolonged stalemate. Wall Street Insights noted that the UAE announced its withdrawal from OPEC and OPEC+ effective May 1, and would gradually increase oil production. The announcement briefly caused oil prices to pull back before quickly recovering. (Wall Street Insights) On April 28 local time, the UAE announced its withdrawal from OPEC and OPEC+ effective May 1, 2026. UAE Energy Minister Suhail Al Mazrouei told media on April 28 that the UAE chose to exit OPEC at this time primarily considering factors such as current restrictions on passage through the Strait of Hormuz, and believed the decision would have limited impact on the global oil market. Al Mazrouei told CNN reporters that the UAE's announcement came at the "right time" and would not significantly affect the oil market or prices, as passage through the Strait of Hormuz was restricted, including for the UAE. This decision would help ease pressure on prices. (Jin10 Data) Ole Hansen, Head of Commodity Strategy at Saxo Bank, stated that in the short to medium term, given that global inventory has been depleted and reserves need to be rebuilt, the market should be able to absorb the increased production from the UAE. However, over time, this exit raised a broader strategic question: if other producing countries began to prioritize market share over quota discipline, OPEC's ability to manage an orderly market through coordinated supply adjustments could face increasing scrutiny. HSBC said in a research note on Tuesday that the UAE's exit from OPEC+ would have a relatively small short-term impact on the oil market, but over time could undermine the organization's supply discipline and price management capability. HSBC expected little change in global oil supply in the near term, as crude oil exports from the Gulf region had remained restricted since the end of February. During the period of constrained shipping routes, the UAE had limited room to increase production. The Abu Dhabi crude oil pipeline had a daily transport capacity of approximately 1.8 million barrels and was most likely already operating at full capacity. Once the Strait of Hormuz shipping lane resumed navigation, the UAE would no longer be bound by OPEC+ production quotas and could gradually increase production. The bank estimated that Abu Dhabi National Oil Company (ADNOC) daily production is expected to rise to over 4.5 million barrels, while the OPEC+ quota during May 2026 was approximately 3.4 million barrels per day. HSBC said any supply increments are expected to be released in phases over 12 to 18 months, rather than immediately.