[SMM Nickel Morning Meeting Summary] US non-farm payrolls data beat expectations, rate hike expectations heated up, the most-traded SHFE nickel contract moved sideways in early trading

[11.1 Morning Meeting Notes] US October nonfarm payrolls blew past expectations, fueling bets on a December rate hike. Nonfarm payrolls added 165,000 jobs in October, far exceeding the expected 65,000 and hitting the highest since March this year, with August and September figures revised up by a combined 84,000. The unemployment rate fell to 4.1%, and average hourly earnings rose 3.1% YoY, beating expectations. After the data release, CME pricing showed the probability of a December rate hike rising to 78% (from 67% previously). New York Fed’s Williams said inflation is still too high and must ensure a timely return to 2%, while San Francisco Fed’s Daly said further rate hikes are still expected. The most-traded SHFE nickel contract (2612) moved sideways in early trading, closing the morning session at 123,290 yuan/mt, up 0.33%. The current rebound was mainly driven by continuous short covering by bears. The renewed strength in the US dollar and US Treasury yields is exerting pressure. Despite production cut rumors in the market, bulls have yet to enter in force, and bulls and bears have entered a new equilibrium. Going forward, attention should remain on US Fed actions and whether nickel production cuts materialize. In the short term, the most-traded SHFE nickel contract price is expected to trade in the range of 120,000-126,000 yuan/mt.



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