Reiterating Rebound in Nonferrous Metals Sector (2026-07-30)

English summary

The Fed kept rates unchanged, with Warsh reiterating the 2% inflation target, but market expectations for a September rate hike fell from ~81% to 64% after the decision. We maintain our view of a rebound in the nonferrous metals sector. Warsh's statements were largely unchanged from June, reiterating the 2% PCE target while saying 'the inflation gauge I refer to is broader than PCE.' The inflation gauge may be refined; with no hike now, the probability of future hikes is even lower. (2) Internal Fed divisions require continued cooling employment and inflation data; we favor a restart of rate-cut expectations after weaker July-August data, with Q4 offering a bigger rally in nonferrous metals. Gold and copper remain preferred in the rebound. We continue to favor the Zijin group, Zhaojin group, Lingbao, Western Mining (domestic mines), and Jincheng Xin.