Daily Report 300115 2015-01-30
Domestic AU1506 contracts opened low and went lower during the night session, broke downward overnight after 7-day high sideways, and got support at 20-day moving average in short-term.
Operation advices: establish short positions weakly breaking down RMB 258 in short time, lighten up by moderate amount at RMB 253. Might slightly rebound, but the downward trend will keep going if cannot plant firmly at RMB 245.5.
Fed’s January Reserve Meeting shows the optimism towards economic outlook. Moreover, employment data performed strongly, inspires confidence for U.S. economy recovery. Although overseas economies and inflation rate are sluggish, Fed’s expectation of interest raise unchanged. U.S. stocks rose, while the risk-free asset—gold were underselling, plus long positions have been taken profits, the market is eager to ease all the burdens. The biggest drop on Thursday is $34. However, monitoring data shows that funds remain buying, and there have been 4 position-raises of Gold ETF in 7 days, increased 5.67 tons overnight, indicating the bearish view of funds against gold prices.
Generally, recent gold prices might have reached the periodical top, is likely to fall associated with fluctuation. Can try to short on the rebound in short-term, but beware of Greek local risks trigger risk-averse buying.
Domestic AG1506 contracts dropped coping with gold prices during the night session, the decline range is 5.54% high.
Operation advices: long positions established at RMB 3,600 can be taken profit at RMB 3,800, and then take short positions while weakly breaking down RMB 3,800. Observe the effectiveness of supports at RMB 3,600 and RMB 3,500.
Overall, silver prices move with gold prices, showing more significant volatility. Overseas silver prices bounced back at $18.5 and then declined under pressures, the drop of Thursday is 5.78% high, offsetting the increase of former two weeks. The rebound pattern is likely to end up recently, but no significant bearish signs, and might appear to dip associated with fluctuations.
Stock Index
Stock index continued to open low and weakly fluctuated yesterday. Influenced by the latest news of margin trading investigation by the China Securities Regulatory Commission (CSRC), worries towards capitals heated up. In addition, China Insurance Regulatory Commission (CIRC) reported to monitor insurance asset management, planning to investigate risky asset margin trading. Although insiders considered this as to ensure the compliance of operations, and had limited impacts on the market due to the small scale, insurance companies, securities and banks see risks of margin trading, are harmful for regulation and market sentiments.
After continuous corrections, stock index might rebound in short-term, but performed relatively weak.
Domestic and overseas copper prices retested the recent low, with small waves. Domestic position holdings were near the record high, of 924,000 lots. The recent domestic trading volume is higher than 1 million lots. Overnight domestic continuous trading volume is over 650,000 lots, indicating that standing at this price, neither long nor short positions are stable. That is due to the likelihood of the SRB’s copper buying. The latest news announced, the SRB planned to purchase 200,000 tons of coppers from international markets. While the actual purchasing volume may be 2 times of that number if prices are low. The SRB initially planned to buy 200,000-250,000 tons of copper in 2015, majority of whom is going to be delivered in the first half year. View large holders’ positions, a significant long position holding 20-29% of the 2-month contract generated on 27th January. Concern whether this is relative to the SRB.
On the fundamental hand, LME premium increased by $6 to $38, inventory surged by 2,775 tons to 247,000 tons. Domestic spot changed from par to RMB 50 premium, having bounced back by RMB 40.
On the supply hand, crushers of Teniente mining (belongs to Codelco) fired. Teniente claimed that the operation had not been undermined. The annual output of this mining is approximately 400,000 tons. New governments of Greece put forward to write down debts and delay payments, its negotiation with creditors is under the spotlight.
Technically, there are wide conflicts for copper prices at lows, wait for the market brightness. LME copper contracts could get rid of weakness only if break through $5,500. The resistance of domestic 4-month copper contracts is at RMB 39,550.
LME 3-month aluminum closed down by 1.19% at $1,821/ton on Thursday. Domestic aluminum is more firm, SHFE aluminum closed down by 0.555% at RMB 12,770/ton. Yesterday, Germany announced the CPI of January, shrunk by 0.3% month-on-month—the first negative data since September 2009.
The PBOC continued its 28-day reverse repo to provide liquidity. On the industry hand, yearly coal negotiation nailed down, electricity companies accept the offer of Shenhua (RMB 520/ton long-term price). The macro economic data is not going well, central banks all over the world are conducting loose monetary policies, U.S. dollar continuously went stronger, pressured basic metals. View on short-term, copper prices are walking downhill with fluctuations, and aluminum prices are likely to remain in the fluctuation interval, investors need to be patient.
Overnight U.S. markets extended its weakness and might keep weakly fluctuating in short-term; and the recent demand and supply of soybean is bearish overall.
DCE edged up in the night session, short-term markets are still bearish. Furthermore, the market is going to encounter a period with low intension of 2 to 3 months. Spot prices continued to edge down in many places. Producing areas cleaning prices averaged at RMB 4,240/ton.
Soymeal spot was stable, few supplements of live stocks, moreover, the demand before the Spring Festival is less than former years. Accordingly, short-term domestic soymeal spot will move weakly. Fortunately, the spot is resistant due to soybean oil plunge.
Operation advices: hold a small amount of previous short positions of DCE soymeal; as for soybean No.1, short-on-the-rebound.
                                                                               Dong LV (Investment Certificate NO. TZ008452)