Daily Report 201114 2014-11-20
Macro Economy

In domestic market, Premier Li Keqiang hosted the executive meeting of the State Council yesterday and claimed that ‘reform and innovation should be insisted on; differentiate credit policy and multi-level capital market should be improved; high financing cost should be lowered down. Charging on small enterprises is shrinking previously. The statement further strengthens the reform and promotes the development of small enterprises. Directional easing monetary policy will remain the major method to control economy. Besides, Domestic HSBC manufacturing PMI index in November will be released today. The previous figure is 50.4 while the figure this term is expected to be 50.2.


Major domestic gold contract AU 1506 fluctuated violently in the night session, but closed nearly flat. The gold soared significantly after decreased to 10-day moving average at RMB 232. In short term, the gold is above the 20-day moving average at RMB 234.5. The rallying trend remains. In terms of operation, previous long positions opened when the gold broke through 5-day moving average could be held. The gold may face the pressure from RMB 240. Bolster effect at RMB 235 will be tested during the intraday trading. Meeting minutes in October released by the Fed on Thursday showed that the Fed is relatively cautious at the moment. Concerns are raised due to potential impact from sudden changing of monetary policy to capital market. The overnight gold ETF dropped 2.10 tons, which offsets gains on Tuesday. On the whole, the gold will remain weak before the rate hike takes place.


Main contract of domestic silver AG 1506 followed the trend of gold and fluctuated violently during the night session. The silver soared substantially to RMB 3455 after dropping to 20-day moving average at RMB 3350. In terms of operations, the weak trend of silver remains, however, the silver may rally in short term. Long positions opened when the silver broke through 5-day moving average at RMB 3350 could be held. Previous loss at RMB 3670 may be offset. In general, silver price followed with the gold price trend; it may hardly get rid of the independent situation. The funds are increasing silver positions, which bolsters the silver. The overnight silver ETF rose by 74.51 tons after remaining flat for 4 days.


On Wednesday LME copper price edged up $55, closed at $6682.5. From the fundamentals, LME spot premium increased $6 to $75; the inventory level edged up 400 tons to 160800 tons. Domestic spot premium is around RMB 80 to 180, slightly edged up RMB 10. However the trading only has a slightly change, which suggest that recently people are lacking confidence on the copper market. Technically, copper price will remain waving in short term; pay attention to the resistance efficiency around $6700.


On Wednesday, LME 3-month aluminum edged up, closed at RMB 2020 per ton, up 0.25%. Wait and see the SHFE aluminum performance or long for short term during the day trading.


Today PP futures opened below RMB 9678. The price rushed up to RMB 9815 which influenced by PTA daily limit and falling back in the end. It closed at RMB 9731; the trading volume increased 41532 lots to 306000 lots; the holdings dropped 4100 lots to 164000 lots.
For instance of the wire drawing price, today's mainstream of North China bid in RMB 10100-10400 per ton, East China mainstream quotation around RMB 10300-10600 per ton, South China mainstream quotation in RMB 10500-10600 per ton. Currently the price of contract 1501 is around the first line of former support level of RMB 9550-9600. Recently the weak waving will in charge of the whole picture.
                                                                                   Dong LV (Investment Certificate NO. TZ008452)