Daily Report 081214 2014-12-08
Macro Economy
The US nonfarm payrolls grew widely that contributed to the increasing expectations of interest raise. The US stock market set a record on last Friday; the Dow Jones index (DJI) had less than 10 point to reach 18,000 point. Employment report, better than expected, covered the influence caused by oil stocks failure. Thus, Standard & Poor’s (S&P) 500 index closed up 0.17% to 2,075.37 point, which refreshed the highest record. It is reported that the US nonfarm payrolls of December increased 321,000, the highest number since January, 2012, while the unemployment rate stayed at 5.8%, the lowest point in the last six years. This intensified the Fed to bring forward the interest raise. However, current inflation rate has not reached the target, and mixed outputs brought economic risks in a certain degree. Therefore, the Fed might keeps silence on interest raise. Besides, there was a narrowed trade deficit in October, and factory orders reduced 0.7% simultaneously. The GDP growth in Q3 of euro zone is 0.2% the same as the initial; investments dipped 0.3%, created obstacles in economic growth. The German Bundesbank readjusted the estimation of GDP growth from 2% to 1%, and keeps objecting to quantitative easing (QE). Accordingly, it is hard for euro zone economy to take off. As for the domestic market, Political Bureau of Communist Party of China (CPC) Central Committee convened a meeting about economic works in 2015 on 5th December. The conference highlighted to keep the balance between stable development and structural adjustment, the stablelization and continuous of macro policies, the implementation of proactive fiscal policy and solid monetary policy, and to promote the construction of the concept of “OBAOR (One Belt and One Road”. Though the Chinese government emphasized to remain current monetary policy, the essential easing environment, given the circumstance of interest cut circulation, might be remained. The General Administration of Customs is going to report the foreign trade data. Just to remind, the import and export growth of last period were 11.6% and 4.6%, surplus was $454.1 billion.
Stock Index
The stock index has gone through an acute phase on last Friday, and closed up in the end. Although there were little changes on the macro aspect, funds aspect and basic aspects of leading varieties of security and insurance, the expectation for a shrink of capital costs will remain the same, which support the index to rise. However, it is a bit fast for indexes to rise, and the ranges were wide, and there are divergent opinions on long/short positions, this lead to a more violent fluctuation of the market. Currently, risks are focusing on the trading layer. Try to eye the steadiness of trends on one hand, pay attention to the adjustments and risk control on the other hand.
Boosted by technical buying and new demand of export, the US soybean closed up last Friday. Market flatted fundamentally; thus, focus on how will the polled data on Wednesday’s monthly supply and demand report lead the market. From the expectations, annual levels of global soybean inventory for 2014 and 2015, hopefully, would be lowered for 400,000 tons to 89.9 million tons. Recall the performance of the US soybean last week, we consider that the $10 line has, still, strong support for the prices, and led to the futures prices back to $10-11 section. The market focus would still on demand in the future; prices would major on rebound making use of any chances, and bottom via vibrations. DCE soybean No. 1 rebounded last week. The market appeared corners. Precisely, the present prices are lying based on warehouse stock costs, adding zero pressures for warehouse stock registration, the market during this period can be defined as that those long position investors are pushing the price so that could sell the inventory on a higher price. From the afternoon trading market, there was a more intensive bearish point of view on spot prices in manufacturing areas. DCE soy meals showed resistance to drop, while the market was pressured to rebound. And that was due to the increased supply from domestic ports. The DCE soybean meal shows an enhanced resilient feature because of the rebound of the US market. In operations, reduce short positions of DCE soybean meal, or just leave the market; cut long potions of soybean No. 1, or just leave the market once the prices is high enough. Beware of drops after long positions have been pulled up during this round.
                                                                                    Dong LV (Investment Certificate NO. TZ008452)