U.S. Core PCE Inflation (May) Holds at 3.4%, In Line With Forecasts

Friday, June 26, 2026 — Futures Morning Rush Top headlines 1) China's Ministry of Commerce said the latest China–U.S. trade consultations produced a consensus to set up a Trade Council. The two sides will discuss reciprocal tariff reductions and other cooperation under the new mechanism. 2) The UK government said it will tighten tariff-free steel imports, cutting the overall quota by 51% versus its steel safeguard regime. Imports above quota will face a 50% tariff. 3) Indonesia's Energy Ministry issued regulations to implement its B50 mandate from July 1, requiring diesel sold to contain 50% palm oil-based biodiesel. 4) Iraq's Oil Ministry denied that the country is considering leaving OPEC. 5) Indonesia's mining authority said no decision has been made on the total 2026 nickel production quota. 6) Fubao Information survey: as of June 25, weekly lithium carbonate output was 26,200 tons, up 1.55% week on week. Macro and policy 1) China's National Energy Administration said total installed power generation capacity reached 4.01 billion kW by end-May 2026, ranking No. 1 globally. 2) IRGC Navy: vessels transiting the Strait of Hormuz must coordinate on Channel 16; violators will face action. 3) Xinhua cited MOFCOM spokesperson He Yadong reiterating the Trade Council plan following China–U.S. consultations. 4) U.S. Commerce Department data: May core PCE price index rose 3.4% year on year, matching expectations and marking the highest level since October 2023. 5) Fed commentary: Williams said inflation pressures should ease, but the 2% target may not be reached until 2028. Goolsbee said underlying inflation remains too high and is moving in the wrong direction, backing Waller's view that markets should avoid speculating on future rate paths. A ruling in the Governor Cook case is expected next week. Global futures moves 1) Crude: front-month WTI +1.61% to $71.47/bbl; front-month Brent +1.65% to $75.09/bbl. 2) Precious metals: COMEX gold +0.82% to $4,041.60/oz; COMEX silver -0.34% to $57.89/oz. 3) LME base metals mostly higher: aluminum +2.02% to $3,185.5/ton; copper +1.75% to $13,316.0/ton; tin +0.94% to $50,150.0/ton; zinc +0.48% to $3,438.0/ton; nickel +0.28% to $16,865.0/ton; lead -0.03% to $1,912.5/ton. 4) U.S. grains (as of 2:20): soybeans +1.86%, corn +2.04%, soybean oil +1.99%, soybean meal +1.29%, wheat +0.88%. Ferrous and coal-coke 1) Mysteel: capacity utilization at 523 coking coal mines was 68.2% this week, down 3.0% month on month. Average daily raw coal output was 1.531 million tons (-68,000 MoM); raw coal inventory 4.433 million tons (-78,000 MoM). Average daily clean coal output 671,000 tons (-14,000 MoM); clean coal inventory 1.739 million tons (+30,000 MoM). 2) NDRC departments: push thermal power to shift toward supportive and balancing roles; optimize thermal power layout; reasonably control coal-fired installed capacity and generation. 3) UK: tariff-free steel import quota to be cut 51% vs safeguards; 50% tariff above quota. 4) China Iron and Steel Association: mid-June 2026, key steelmakers produced 21.0 million tons of crude steel, averaging 2.1 million tons/day (+0.8% MoM). Pig iron output was 19.01 million tons, averaging 1.901 million tons/day (+0.7% MoM). 5) Mysteel rebar: production 2.1325 million tons (-54,800). Mill inventory 1.9625 million tons (+113,300); social inventory 4.8714 million tons (+131,700). Apparent demand 1.8875 million tons (-320,500). 6) Mysteel Coal & Coke: profit at 30 independent coking plants averaged 31 yuan/ton nationwide. Secondary-grade coke profits: Shanxi 48 yuan/ton; Shandong 71 yuan/ton; Inner Mongolia 40 yuan/ton; Hebei 76 yuan/ton. Agriculture 1) Reuters survey: U.S. soybean stocks as of June 1 seen at 1.046 billion bushels (+3.8% YoY), potentially the highest for the date since 2020. Corn stocks seen at 5.408 billion bushels (+16.5% YoY), potentially the highest since June 1, 1988. Wheat stocks seen at 934 million bushels (+9.3% YoY), potentially the highest since June 1, 2020. 2) Ahead of USDA acreage report, analysts expect U.S. soybean planted area at 853.69 million acres (range 843–860 million). U.S. 2026 corn planted area seen at 949.92 million acres (range 939.5–963 million). U.S. all-wheat planted area seen at 438.58 million acres. 3) Indonesia: B50 mandate effective July 1; a three-month transition period allows retailers to clear existing stocks. 4) AmSpec: Malaysia palm oil exports for June 1–25 at 1,052,631 tons, up 11.1% from 947,430 tons in the same period last month. 5) ITS: Malaysia palm oil exports for June 1–25 at 1,127,867 tons, up 10.6% from 1,019,777 tons in the same period last month. 6) USDA weekly export sales (week ended June 18): 2025/26 soybeans net sales 4.554 million metric tons vs 4.249 million the prior week. 2025/26 corn net sales 7.431 million metric tons vs 11.571 million. 2026/27 wheat net sales 5.045 million metric tons vs 4.008 million. 7) IGC monthly report: 2026/27 global soybean production forecast unchanged at 442 million metric tons; trade unchanged at 190 million; consumption down 43.3 million to 445 million; ending stocks seen down 0 million to 76 million metric tons. Energy and chemicals 1) Longzhong: as of June 25, China soda ash inventory totaled 1.7324 million tons, up 0.006 million from Monday (+0.35%). Light soda ash 1.0722 million (+0.0053); heavy soda ash 0.6602 million (+0.0007). Versus last Thursday, total inventory +0.0322 million (+1.89%). 2) NDRC departments: keep annual crude oil output stable at 200 million tons; maintain steady growth in natural gas production. 3) Enterprise Singapore: week ended June 24, Singapore fuel oil inventories rose 5.311 million barrels to a four-week high of 20.302 million. Light distillates +1.334 million to 13.365 million (four-week high). Middle distillates +283,000 to 8.519 million (four-week high). 4) Iraq/OPEC: an Iraqi Oil Ministry official said the government is "considering all feasible options, including exiting OPEC" if quota increases are not significant. The ministry later clarified that such reports do not reflect the government's official position, and neither the Prime Minister nor the government has discussed leaving OPEC. 5) U.S. Energy Secretary Wright: the release of 172 million barrels from the strategic petroleum reserve is still underway. Iran's crude exports are expected to reach up to 2 million barrels per day. 6) Longzhong: as of June 25, national daily float glass output was 1.46 million tons, down 1.35% vs June 18. June 19–25 output totaled 1.0314 million tons, up 0.33% WoW but down 5.46% YoY. Operating rate was 68.37%, down 0.68 percentage points vs June 18. 7) Longzhong: as of June 25, float glass sample inventory totaled 76.443 million standard boxes, up 0.45 million (+0.59%) period on period and up 10.44% year on year. Inventory turnover days rose to 34.2, up 0.3. 8) Egypt: an official gazette decision shows nitrogen fertilizer export taxes were revised, replacing a $90/ton fixed levy with a 10% ad valorem tax on export value. High-purity ammonium nitrate is exempt. 9) EIA natural gas: week ended June 19, U.S. working gas in storage was 2.835 trillion cubic feet, up 76 bcf WoW, down 49 bcf YoY (-1.7%), and 152 bcf above the five-year average (+5.7%). 10) As of June 25, methanol inventory at East China ports was 211,100 tons, down from 262,500 tons on June 18, a decrease of 51,400 tons. Metals 1) ALD: the first shipment of Malaysian ore arrived at Bintan Alumina in mid-June, opening a maritime logistics channel. Imported ore is expected to ease a supply gap linked to delays in approving Indonesia's RKAB bauxite mining quotas. 2) Indonesia mining authority: no decision yet on the 2026 nickel ore production quota. The government aims to align ore output with downstream demand; quota adjustments must go through a review process. 3) SMM: as of June 25, industrial silicon social inventory in major regions totaled 556,000 tons, down 3,000 tons from last week (excluding Inner Mongolia, Gansu, Ningxia and other areas). 4) Fubao Information survey: as of June 25, weekly lithium carbonate output 26,200 tons (+1.55% WoW, +400 tons). Lithium carbonate inventory 96,400 tons (-0.58% WoW, -564 tons). 5) Hong Kong government: net gold exports from Hong Kong to mainland China in May were 53.674 tons vs 86.715 tons previously. Total exports in May were 65.562 tons vs 99.327 tons previously. Market views 1) Palm oil: medium- to long-term bullish factors remain, but near-term supply-demand pressure persists. Xinhu Futures said domestic palm oil futures saw rising open interest and a sharp drop in the morning session, then partially rebounded in the afternoon. Indonesia confirmed B50 implementation from July 1, with a three-month transition from B40. The phased rollout was largely expected. Recent oil price declines have eroded the commercial profitability of palm-oil-based diesel in Indonesia, though institutions see limited downside in crude over the medium term and subsidy pressure as manageable for now. Indonesia's target for 2026 is 17.6 million kiloliters of biodiesel, with a potential maximum YoY increase in palm-based diesel consumption of 3 million tons, but outcomes depend on enforcement and subsidy funding. Malaysia's June inventories may move slightly but remain high, and supply in producing regions is expected to stay elevated. El Niño has appeared, but production impacts are likely later; rainfall and soil moisture in Indonesia and Malaysia remain favorable. Prices may struggle during the inventory build phase; a swing-trading approach is advised when timing longer-term bullish opportunities. 2) Aluminum: Yide Futures said aluminum prices have trended lower since mid-April, with declines accelerating recently and breaking below the 23,000 yuan/ton support zone that held since the start of the year. Drivers include macro headwinds, fading geopolitical premium and expectations for higher supply. New overseas capacity and Middle East restarts suggest the supply-demand gap is narrowing, weakening forward expectations. The size of any real shortfall depends on demand and needs confirmation via more meaningful inventory draws. Technically, focus is on the 23,000 yuan/ton line; failure to regain it would keep the short-term downtrend intact, with 22,000 yuan/ton as the next key support. Watchpoints include Strait traffic data, the U.S. dollar index and Treasury yields, whether domestic inventories can keep falling by 20,000–30,000 tons per week, the strength of domestic demand recovery (autos, appliances, solar, etc.), and overseas ramp-ups/restarts (Indonesia, the Middle East, etc.). Today's key data and events 1) Iron ore inventory at 45 Chinese ports as of June 25: pending. 2) China's breeding/raising profit for self-bred and purchased piglets as of June 26: pending.