The interest rate cut cycle is here!The Federal Reserve's interest rate cut boosts sentiment,and nickel prices have also been disturbed to some extent,fluctuating upwards.However,the fundamental surplus is always an unavoidable hurdle.What should be the next approach: rebound and short sell or buy on the dip?

The Federal Reserve's interest rate cut this time is controversial.

Last Friday,a key figure of the Federal Reserve,Governor Waller,made another dovish statement.Waller said that inflation data prompted him to support a 50 basis point interest rate cut.He expects that personal consumption expenditure in August will be very low,and the core personal consumption expenditure indicator is running below the Fed's target,with the pace of decline in U.S.inflation far exceeding expectations.Governor Bowman,the only Federal Reserve governor who voted against the rate cut in this interest rate meeting,stated that he respects the opinions of other members who advocate for a more substantial interest rate cut.However,Bowman believes that the U.S.economy still has resilience,and the labor market remains close to full employment.

The Federal Reserve has entered a substantive interest rate cut cycle!

At present,the Federal Reserve has entered a substantive interest rate cut cycle.According to the dot plot forecast,there is still a 50 basis point interest rate cut within the year,and the market's pricing for the rate cut is even more aggressive.According to the CME interest rate monitor data,the market expects a 25 basis point interest rate cut at the Fed's November 7 interest rate meeting with a probability of 48.6%,while the probability of a 50 basis point interest rate cut is 51.4%,slightly higher; the probability of a cumulative interest rate cut to the 4.00-4.25% interest rate range at the December 18 interest rate meeting is 98.31%,which means the market predicts there is still a 75 basis point interest rate cut within the year.This undoubtedly theoretically boosts commodities.

Resource end: Going its own way!

Last week,nickel ore prices fell slightly,and the overall market sentiment weakened.The profits of local iron factories in Indonesia were somewhat reduced due to the impact of ferronickel prices,leading to a mentality of suppressing the price when purchasing raw materials.The inventory of nickel ore at domestic ports increased slightly.As of September 13,the inventory of nickel ore at ports was reported to be 14.45 million tons,a 6.7% increase compared to the same period last month.The CIF quote for 1.5% grade nickel ore from the Philippines is $54 per wet ton,a decrease of $1 per wet ton compared to last week.

Intermediate products: The coefficient price of raw materials will decrease.

With the slight decline in nickel ore prices,the coefficient price of intermediate products loosened last week.Currently,the MHP coefficient is 81 against LME nickel,and the high-grade nickel coefficient is 84.5 against LME nickel.It is expected that in the short term,the coefficient price of intermediate products will still be relatively stable.In the medium to long term,with the production of Indonesian wet-process intermediate product projects,it is expected that the coefficient price of raw materials will decrease.

Nickel sulfate: The stalemate between supply and demand!Last week,the price of nickel sulfate remained stable.Currently,nickel sulfate maintains a cost-based pricing logic,with intermediate product discounts still at a high level.Against the backdrop of rising nickel prices,the cost of nickel sulfate has increased,and the price bottom support remains.In terms of supply and demand,downstream material factories have mostly completed their inventory preparations,the overall market transaction is relatively cold,and both sides are in a deadlocked game phase.It is expected that the price of nickel sulfate will remain stable in the short term.

Is it a rebound to sell short or a fall to go long?

The valuation of nickel prices continues to be repaired,and there is no significant change in the fundamentals in the short term.As nickel prices rebound,the wait-and-see sentiment of downstream increases,and downstream rigid demand has been mostly released recently,with spot transactions being relatively cold.In terms of exports,it is still at a high level,but it is relatively difficult to continue to increase,and the price difference between the two markets has widened,paying attention to overseas situations.At present,refined nickel maintains an oversupply pattern,and the price in the medium and long term is pessimistic.It is expected that nickel prices will maintain a volatile trend this week.

In September,the production arrangement of stainless steel is still at a high level,but the demand side is not good,the market transaction atmosphere is relatively cold,and inventory continues to accumulate,with the overall fundamentals being weak.In terms of cost,the price of nickel iron fell slightly last week,and there is a certain expectation of relaxation in Indonesia,but the ore price fell slightly but the decline is limited,and the cost support of nickel iron remains.It is expected that the price of stainless steel will maintain a weak and volatile trend this week.