Understanding the Market | Non-ferrous stocks under pressure collectively, rising energy prices push up inflation levels, and expectations for Federal Reserve interest rate hikes increase
Affected by rising energy prices pushing up inflation and expectations of interest rate hikes by the Federal Reserve, non-ferrous stocks are under collective pressure. CMOC and MMG fell more than 4%. The President of the Cleveland Federal Reserve hinted that if inflation worsens, interest rate hikes may be restarted. The market expects a very high probability of maintaining interest rates in June, with an increased probability of a rate hike in July
According to the Zhitong Finance APP, non-ferrous stocks are under pressure across the board. As of the time of writing, Luoyang Molybdenum Co., Ltd. (03993) is down 5.65%, trading at HKD 18.72; MMG (01208) is down 4.4%, trading at HKD 9.35; Jiangxi Copper Co., Ltd. (00358) is down 4.17%, trading at HKD 36.16; Zijin Mining Group Co., Ltd. (02259) is down 3.36%, trading at HKD 120.8; and Aluminum Corporation of China Limited (02600) is down 3.8%, trading at HKD 11.14.
On the news front, on June 3 local time, the Federal Reserve's national economic conditions survey report indicated that rising energy prices have pushed up inflation levels. Since the second quarter of this year, U.S. inflation data has repeatedly rebounded, and the resilience of the labor market has exceeded expectations. Coupled with a renewed rise in global energy prices, market expectations for the Federal Reserve's monetary policy have fundamentally reversed. Cleveland Fed President Loretta Mester stated on Tuesday that if the currently high inflation pressures continue to intensify, the Federal Reserve may soon need to restart interest rate hikes.
According to CME's "FedWatch": The probability of the Federal Reserve maintaining interest rates unchanged in June is 98.4%, with a cumulative probability of a 25 basis point rate cut at 1.6%. The probability of the Federal Reserve maintaining interest rates unchanged in July is 90.2%, with a cumulative probability of a 25 basis point rate hike at 8.4%, and a cumulative probability of a 25 basis point rate cut at 1.4%
