In the domestic metals market at the close of daytime trading, base metals showed a mixed performance. Shanghai tin rose by 1.94%, while Shanghai aluminum, Shanghai lead, and Shanghai nickel all fell by more than 1%. Specifically, Shanghai aluminum dropped 1.98%, Shanghai lead declined 1.2%, and Shanghai nickel decreased 1.53%. The remaining metals saw gains or losses within 1%.
The main contract for alumina fell 1.28%, and foundry aluminum dropped 1.01%. Additionally, the main contract for lithium carbonate surged 8.36%, polysilicon gained 0.48%, and industrial silicon edged up 0.06%. The main contract for European container freight fell 1.05% to 3,687.
In the ferrous sector, prices collectively rose. Iron ore gained 0.61%, stainless steel increased 0.27%, while other metals showed minimal fluctuations. For the coking duo, coking coal rose 0.99% and coke inched up 0.05%.
In the overseas base metals market as of 15:05, only LME lead was in the red, falling 0.05%. LME tin led the gains with a 2.11% increase, while other metals rose by less than 1%.
In the precious metals sector as of 15:05, COMEX gold rose 0.05% and COMEX silver gained 1.43%. Domestically, Shanghai gold fell 1.11% while Shanghai silver rose 0.9%. Additionally, the main contract for platinum fell 2.65%, and the main contract for palladium rose 1.53%.
Key Domestic Macroeconomic Data
According to data from the National Bureau of Statistics, China's Manufacturing Purchasing Managers' Index (PMI) for June was 50.3%, a 0.3 percentage point increase from the previous month, returning to expansion territory.
By enterprise size, the PMI for large enterprises was 50.7%, down 0.4 percentage points from the previous month but still above the threshold. The PMI for medium-sized enterprises was 50.5%, up 1.9 percentage points from the previous month and above the threshold. The PMI for small enterprises was 48.2%, down 0.3 percentage points from the previous month and below the threshold.
Among the five sub-indices constituting the manufacturing PMI, the production index and the new orders index were above the threshold, while the raw material inventory index, the employment index, and the supplier delivery time index were all below the threshold.
The Non-Manufacturing Business Activity Index for June was 50.2%, up 0.1 percentage points from the previous month, indicating a slight recovery in non-manufacturing business confidence. The service sector expanded at a faster pace, with its Business Activity Index at 50.4%, up 0.1 percentage points.
The Construction Business Activity Index was 49.0%, up 0.2 percentage points from the previous month, showing a modest improvement in sentiment.
Central Bank Operations and Forex
The People's Bank of China conducted a 695 billion yuan 7-day reverse repo operation today at an unchanged interest rate of 1.4%. With 524.5 billion yuan in 7-day reverse repos maturing, this resulted in a net withdrawal of 155 billion yuan for the day. The PBOC also conducted a 600 billion yuan overnight reverse repo operation, with 300 billion yuan maturing.
The central parity rate of the yuan against the US dollar was set at 6.8109 on June 30.
Global Market and Currency Focus
As of 15:05, the US Dollar Index rose 0.15% to 101.27. HSBC suggested 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 of a potential "explosive" rally if the Federal Reserve signals a readiness to tighten policy more aggressively than markets anticipate, or if geopolitical tensions flare up again.
According to the CME FedWatch Tool, the probability of the Fed keeping rates unchanged in July is 70.1%, with a 29.9% chance of a cumulative 25 basis point hike. For September, the probability of unchanged rates is 37.2%, with a 48.8% chance of a cumulative 25 basis point hike and a 14.1% chance of a cumulative 50 basis point hike.
Key Data and Events to Watch
A range of economic data is scheduled for release, including US housing price indices, PMI, job openings, and consumer confidence figures for June. Data from the UK, Germany, France, Switzerland, Canada, and Japan are also due.
Notable events include an opening speech by ECB President Christine Lagarde at the Global Central Bank Forum in Sintra, the release of the Reserve Bank of Australia's June monetary policy meeting minutes, and technical talks between the US and Iran.
Markets in Hong Kong and Canada will be closed on July 1 for holidays, with northbound and southbound trading suspended in Hong Kong.
Commodities: Oil and Analyst Views
As of 15:05, oil prices in both major benchmarks declined, with US crude down 0.81% and Brent crude down 0.61%.
Morgan Stanley lowered its Brent crude price forecasts, citing a faster-than-expected reopening of the Strait of Hormuz, persistently high US exports, and low Chinese imports. The bank cut its Q3 2026 forecast by $15 to $75 per barrel and made downward revisions for subsequent quarters.
The bank noted that achieving market balance in 2027 would require Hormuz oil flows to recover to only about 65% of pre-conflict levels, around 11-12 million barrels per day, and that observable inventories could increase by 3 million barrels per day in 2027, potentially weighing on prices.
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