China's electric vehicle market is becoming increasingly saturated, competitive, and evolving quickly, with automakers offering aggressive incentives while Tesla hikes prices. In the midst of this intense rivalry, Xiaomi made a disruptive entry by launching its affordable SU7 EV model, garnering over 100,000 pre-orders within 24 hours of its debut. As traditional American automakers like Ford and GM cut EV investments, Tesla and BYD are expected to maintain pricing power in China's vast but increasingly crowded EV market. The outlook is bleak for Tesla, as the cost of materials for battery manufacturing is set to double by 2027, while intense competition may force Tesla to rely on US sanctions on China to survive as the future is possibly populated with China-made EVs.


Dow Jones is down almost 400 points thanks to notable selloffs in health insurers' stocks ahead of the Fed president's speech later in the day and the Fed chair's speech tomorrow. Traders reduced the probability of a rate cut by the Fed in June to 61%, with two more cuts projected for 2024, after expanded manufacturing data raised doubts on planned rate cuts. Tesla's stock dropped nearly 5% after the company reported lower first quarter deliveries.


Gold prices notched another fresh record high with growing safe-haven demand, regardless of a strengthening U.S. dollar. Silver prices also rebounded above $25.5 per ounce, nearing one-year highs, supported by optimistic factory activity and a commodity buying spree. The rally in precious metals occurred against a combination of traditional headwinds, including a stronger dollar, rising Treasury yields, and higher-for-longer rates, while disconnecting from real yields.


Oil prices ticked lower ahead of U.S. inventories report and the OPEC meeting. The main focus is still on the OPEC+ meeting that is expected to keep production low, although fears of a broader Middle East conflict take centre after Iran vowed retaliation against Israel for strikes on its consulate in Syria. Key factors boosting prices were expectations of tighter supplies from the third straight weekly U.S. inventory draw, Mexico's export cuts, and continued attacks on Russia's energy infrastructure.


The greenback took a break from recent multi-month highs as traders balanced stronger U.S. economic data and a lack thereof for the Fed to manifest data-dependent cuts. The Japanese yen steadied around the mid-151 level after lower Tokyo inflation slowed, contemplating rate hike sustainability. Meanwhile, pressure kept growing on the Chinese yuan, which traded firmly above the key 7.2 per dollar level, regardless of the PBoC pledge to prop up the currency.