Daily Report 080115 2015-01-08
Domestic gold 1506 dominant futures contracts narrowly adjusted in the night session, short-term 5-day moving average crossed above 20-day moving average, indicating the remaining rebound trend. Advices for techniques: light warehouse when the price break through RMB 245, long short-term contracts, square the account if benefit in the morning session; callbacks is expected to appear in couple of days, pay attention to the support at 5-day moving average of RMB 243.7. Situations are divergent between the U.S. and Europe, inflation of December in the Euro Zone fell to negative, deflation risk intensified. Furthermore, the European Central Bank (ECB) is difficult to adopt easing policy before Greek election accomplished. Thus, euro kept falling. In contract, the U.S. private sector employment data of December improved continuously, indicating the recovery of labor market. Although the newly released Fed’s interest rate meeting notes of December shows that overseas economic deterioration might restrain U.S. economy recovery, oil price depreciation benefited U.S. economy and employment and would not pressure the Fed’s interest raise. Mid-term inflation would come close to 2%, while the interest raise time-points depend on the economic data. Overall, the Fed remains optimistic towards the economy, both U.S. dollar index and U.S. stock are surging, which means gold prices would be under pressure. Funds showed that the Funds kept selling gold positions for two days, gold ETF cut 2.99 tons of positions overnight, indicating that the Funds held bearish view towards gold prices.
Domestic silver 1506 dominant futures contracts edged up in the night session, short-term 5-day moving average crossed above 20-day moving average appeared rebound trend, but lacked impulsion, strong at RMB 3,600. Techniques advices: halve long positions established when broke through RMB 3,510, stop loss at RMB 3,490; callbacks may appear in a couple of days, pay attention to the effectiveness of the support at 5-day moving average of RMB 3,540. As a whole, silver prices change along with gold prices, but continuously pressure at RMB 3,700, the weakness in mid-term is hard to be changed. Funds show that positions of silver ETF remain sell-at-rally since the beginning of December 2014, and cut 29.78 tons of positions overnight, indicating that the Funds’ bearish view of silver prices.
Stock Index
The stock index was generally sideways yesterday, spot trading volume shrunk. Led shares remained rotation form, SME and GEM pulled back, the rebound of securities and petroleum drove the index. On top of that, “One Belt and One Road”, state-owned enterprise reform acted on the market. Although the increasing trend of index is about to slow down, it remains strong pattern as a whole. 10 new stocks are going to subscribe next week, which tests the funds of the stock market again. Short-term index shocks are inevitable, we suggest keeping cautious in operation.
Overnight U.S. basically closed flat. The market fluctuated due to the coming monthly demand and supply report; market fundamentals performed peacefully. Information: 1. Organizational investigation revealed, U.S. soybean sowing area would, hopefully, expand 5% to 8,830,000 acres. 2. Market expectations of weekly soybean export sales is 500,000-700,000 tons, the figure of former week is 610,000 tons.
U.S. soybean temporarily pressured at 1,060 cents. The market is waiting for the guide of next week’s report. Short-term prices waved between 1,000 cents and 1,060 cents; pay attention to the USDA demand and supply data and inventory readjustment of next Monday.
DCE soybean No.1 1501 contracts formally turned into delivery month, domestic soybean spot prices performed stable. Simultaneously, the rebounds of 1505 and 1509 contracts are under the pressure of later delivery selling. Some regions raised soymeal spot prices by RMB 10-20 per ton. The price is being oppressed by the expectation that there would be 7000,000 tons of newly arrived soybeans in January. For Techniques advice, bear DCE soymeal when the price is moving along RMB 2800 under the waving interval, observe the changes of soybean No.1.
PP futures opened low and fluctuated yesterday, opened at RMB 7,485, and closed at RMB 7,432, trading volume reduced 16,434 lots to 682,000 lots, and holding positions increased 33,386 lots to 333,000 lots. For the upstream, propylene prices held the line. For the device aspect, operation rate is normal so far. For the spot aspect, PP prices in most markets remained the decline trend at a RMB 200/ton range. Overnight global crude oil plunged below $50 per ton, triggered pessimism over the whole market, adding that petrochemical enterprises in East China Sinopec, South China Sinopec and East China PetroChina lowered the ex-factory price one by another, investors bear the later market. Downstream enterprises hesitated, lacked purchasing intention, trading volume light.
Dominant quoted prices of wires in north China market is RMB 8,500-9,000 per ton, east China market quoted at 8,600-9,000 per ton, south China quoted at RMB 8,900-9,500 per ton. Fundamentals remain pessimism. From the market status quo, prices slumped below RMB 7,500 yesterday, might signs that the new round of shock interval arrived. It can be considered to shift down the shock interval to RMB 7,000-8,000 and adapt band operation if there is no significant beneficial influence recently. Observe the performance at RMB 7,500 today.
                                                                                          Dong LV (Investment Certificate NO. TZ008452)