Daily Report 190914 2014-09-19
Macro economy
Influenced by decrease of the U.S. initial claims for unemployment benefits and expectations that the U.S. interest rate will remain low, the U.S. stocks rose for three straight days with major stocks index hit new record highs. Specifically, the U.S initial claims for unemployment benefits dropped to a two-month low, indicating a rebounding trend of employment. However, the U.S. housing starts shrank by 14.4%, which is the biggest decrease since April 2013. Whether the U.S. real estate market will recover or not still needs to be seen. Meanwhile, the Fed Chair Janet Yellen states that the employment market has not recovered completely. Many of the families with no assets to rely on are still extremely vulnerable. This statement is in accordance with previous policy to remain interest rate low, which demonstrates the Fed is still expecting the recovery of employment.
As for the Europe, the Scotland referendum ended yesterday. Previous poll showed that people who support independence and against independence are really close. The result will be released today and bring impact to worldwide economy.

Domestically, international business sector in Shanghai Gold Exchange was put into operations in the night market on Thursday. The gold has become the first commodity which is opened to overseas investors. Considering the special currency character of the gold and the international sector is priced and settled with RMB, the opening of Chinese capital account and internationalization of RMB will be boosted. The People’s Bank of China’s repurchase operation rate dropped by 20 basis points yesterday. Besides, RMB 500 billion Standing Lending Facility (SLF) has been released previously. On the whole, the easing method of the People’s Bank of China is being adjusted. The expectation of rate cut may be cooled down in the short term.
 


Gold
 During the night session, gold price openned in a low price followed up rising. In short term, it seems in a virbart adjustment. In terms of operation, previous short positions bought in at high price $249.5 could be held constantly. Yesterday during the session, short positions bought in at low price could all closed out with profit. Intraday focus on the performance at RMB 247 on 5-days moving average. Today focus of the Scottish referendum results, in short term GBP is edged up. The fallback of dollar provide opportunities for gold price tumbled after a slight rebound. Now market betting on Scotland is still stay in the UK, but considering the results of uncertainty, currency risk will affect gold in the short term.

In the medium term, data showed U.S. labor market continues to improve, but real estate is still relatively weak, U.S. stock market is relatively strong, although the fed did not increase the rate of foresight guidance but recent Treasury yields will make gold under pressure.China perspective indicated, the international gold officially launched last night, contract performance difference is more apparent, pay close attention to its impact on the domestic gold and two market arbitrage opportunities.
 


Silver
 During the night session, silver price openned in low but followed up rising. The price tested the performance again at RMB 4080 on 10-days moving average during the session. In terms of operation, previously short positions at RMB 4130 could be held continuely. Yesterday during the session, short positions bought in at low price were all closed out with profit. In short term, market structure is quite vibreated, focus on the performance among RMB 4020 to 4110. Recently, domestic silver appears as backwardation. Spots market seems quite tough against price dropping. However, silver may hardly get rid of independent situation. Investors could use the gold and silver index strategy accordingly.
 
 

Copper
On Thursday, LME copper had a shape slump, closed down by $94. From the Macro perspective, China August Real Estate data indicated that property prices had a straight decline for the fourth month, and it is more likely to deepen the slump. The sustained downturn of China’s demand made people concerned. The Fed on Wednesday suggested that as soon as the rising of interest rates started, the pace may be faster than expected. It is still the market pressure. Overnight, according to data, the U.S. employment has warmed up, but Real Estate recovery fatigue. Last week the initial jobless claims in the United States fell 36000 people to 280000 people, which hit the new long since the middle of this July. On August, the United States total housing construction is 956000, which is far lower than in July 1.12 million, plunged by 14.4%.
 
Fundamentally, LME spot premium flat at $43, inventory level fall 535 tons to 155000 tons. On Thursday domestic sport premium rose RMB 10 to premium RMB 140-250. In early September import losses remains under RMB 1000, which makes the import of copper in favorable. Recently imported brand began to occupy the mainstream of supply, the overall supply of goods is abundant. Middleman is less activited, the downstream purchase according to demand and only buy in a moderate amount if the price is low. It seems in a thin market, people are relatively causious. Global refined copper production in the first seven months rose 3.9% to 12.7 million tons, which is far greater than 2.7% in the first half of this year, according to WBMS data. In considerration of China's copper production in August had 20% growth, global copper production will be further accelerated.
 
Technically, copper price is weak. We tend to say that the high price of copper rebound appeared already. In short term focus on the effectiveness of $6880 on 5-days moving average.
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