Daily Report 110215 2015-02-11
Macro Economy
In domestic market, the CPI in January increased by 0.8% on year-on-year basis. This figure is also much lower than that of last month, which was 1.5%, making a record low in the past five years. It is indicated that the risk of deflation is increasing. Based on the Q4 monetary policy report released by People’s Bank of China, if the price of crude oil changes expectation of inflation and leads to core inflation, the macro policy will be adjusted accordingly. Besides, previous claim that ‘investment housing demand will be restrained’ is eliminated from the report, indicating policy on real estate may be further eased. Currently, the weak domestic economy and demand are likely to remain, which requires further policy, such as interest cut.
Domestic AU1506 edged down during the night session, continuously bore pressure at 250-day moving average of 252 yuan, narrowly corrected at 252-250 yuan as a whole.
Operation strategy: recent rebound of gold prices is likely to end up, and the overall movement is projected to drop associated with fluctuations. For short positions established when weakly breaking below 254.5 yuan intraday, prepare defense at 252 yuan in the short term, pay attention to the effectiveness of the support at 250 yuan intraday.
This week’s spotlight is the Euro group meeting on Wednesday, which refers to the negotiation of rescuing Greece, expectations tend to believe that the EU would offer a 6-month extended rescue plan. Generally, the future of Greece is highly uncertain, beware of gold prices further decrease due to the cool down of risk aversion. On the funds front, Gold ETF remained the same for 6 days, indicating the wait-and-see attitude of funds in the short term.
Domestic AG1506 rushed high and then fell during the night session, bore pressure at 5-day moving average of 3,630 yuan, yet got support at 60-day moving average of 3,565 yuan.
Operation strategy: hold previous short positions established at 3,800 yuan, and prepare defense at 3,700 yuan, pay attention to the effectiveness of the support at 3,600 intraday.
Overall, silver prices move along with gold prices, but performing a weak financial attribute and have stronger volatility.
Overseas silve prices bounced back to $18.5 and then dip under bearing pressure, the rally seem to end up recently, but there is no significant bearish sign. Furthermore, rebound correction might appear after significant plunge. The overall movement is projected to fall associated with fluctuations.
Stock Index
Stock index rebounded yesterday. During the morning session, stock index opened low, and then jump higher influenced by securities, banks and real estate stocks; during the afternoon session, internet related shares began to generate the index, and heavyweights acted on the market again at the end of the session.
CPI moved at lows, there are expectations about fiscal stimulations due to worries about deflation. However, the upward side is pressured by funds, plus the process of IPO has sped up, and the market expects an economic growth, there is little space for the stimulation to act on. The performance of heavyweights and sentiments about fiscal stimulation is prevailing, slight rebounds are likely to happen in the short term.
Overnight U.S. soybean closed down, being affected by the supplement global supply. The market ignored the bullish monthly supply and demand report released intraday. The report revealed that, yearly 2014/15 global soybean carryover stocks forecast lowered to 0.385 billion bushels, the data of January was 0.41 billion bushels, as for the market average was 0.398 billion bushels. The report also lowered Brazil output by 1,000,000 tons to 94,500,000 tons, and raised 1,000,000 tons for Argentinean output to 56,000,000 tons. Besides, the report raised the U.S. crush and export forecast. Taken together, this report has bullish effect towards the market overall. However, since the report remained its estimation that South American Soybean will gain a high yield, and the U.S. soybean sown area in 2015 would break the record. Thus, the future supply pressure is still there, offset the bullish effects of inventory data. On the other hand, the correction would be undermined.
Domestic soybean leveled off during the night session, Soybean No.1 and soymeal remained bilaterally fluctuating—Soybean No.1 waved around 4,400 yuan in the short-term. Theoretically, the warrant cost of Soybean No.1 should be at 4,450-4,550 yuan/ton, focus on the performance at this level. Soymeal spot prices edged up by 10-20 yuan/ton yesterday. The trading volume reduced gradually, and the downturn during the Spring Festival holiday appears gradually. The short-term trajectory is projected to be weak out of stable.
Operation strategy: seek the short opportunity above 4,500 for Soybean No.1; short a light volume of soymeal before the holiday.
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