Daily Report 130215 2015-02-13
Main contracts of domestic gold AU 1506 dropped slightly in the night session. In short term, pressure was found around 5-day moving average at 250 yuan. The bolster effect of 60-day moving average at 246.5 yuan should be focused. Defensive moves should be prepared at 252 yuan. Sound investors are recommended to wait for opportunities after gold breaks through the region between 246.5 yuan to 250 yuan. The overnight Gold ETF dropped 1.8 tons after remaining unchanged for the past six days, indicating the funds are not holding an optimistic view of the gold. In terms of the US, the monthly retail sales rate in January plunged surprisingly, however, the market reacts relatively quiet toward it. Attention should be paid to the initial value of the University of Michigan consumer confidence index, which will be released today. On the whole, the geographic politics and debt risk, which result the previous rally of gold, are easing gradually. It is likely that the gold may drop further afterward.
Main contract of domestic silver AG 1506 kept narrowly correcting the in the night session. The trend afterward will be determined after the silver break through the triangle convergence region. As for operations, previous short positions opened at 3800 yuan could be held. Defensive moves should be prepared at 3,700 yuan. The short-term trend of silver may narrow down. Attention should be paid to the operation opportunities after the silver breaks through the region between 3,600 yuan to 3,570 yuan. On the whole, silver is still following the trend of gold while showing more volatility and the characteristic of weak metal. In foreign market, the silver rallied to $ 18.5 and then dropped. The trend of rally may come to an end these days. However, the decline of silver is limited compare with gold. Investors should be aware of the risk that the silver may drop further afterward.
Stock Index
The positive fiscal policy and sound monetary policy were reiterated in the meeting of the Political Bureau. Currently, the small rebound of stocks is mainly based on the easing of policy. The weighted average interest rate of loans was 6.77% at the end of 2014, decreasing 0.42 in comparison of that earlier last year. After the margin trading was regulated previously, the amount of margin trading rebounds slightly, which may be an important normalized source of funds to the stocks market. Upward bolster effect was found recently, which stimulates the sentiment of investors marginally. However, it is expected that the stock index is not likely to rise higher than 3,500 basis points.
Domestic and overseas copper markets substantially reversed last night, LME copper closed up by 2.14 percent ($120) at $5,716.5. Domestic 5-month contracts closed up by 1.88 percent (770 yuan) at 41,630 yuan. Heads of Russian, Ukrainian, German and French reached an agreement to stop Ukraine from fire, lowered worries about fighting out. That is to say, the Ukrainian crisis can be solved hopefully. The bullish news was reflected on the surge of crude oil index (4.5 percent increase and the plunge of U.S. dollar index (0.97 percent decrease), and also has strongly supported the copper market. Besides, the problem about Greece had new development. It is said that EU tended to expand the Greek urgent liquidity assistance, and Greece may be able to get some succor since both Germany and Greece has compromised in a certain extent. The Euro zone meeting next Monday would continue their discussion aims on Greece. The plunge at the year beginning is relative to both Ukraine and Greece, and now since both are hopefully can be solved, copper prices rebound can be expected.
On the fundamentals front, LME spot premium remained at $11, the inventory rose 4,300 tons to 293,000 tons. There are 32,000 lots of positions holding in LME, with a 30-39 percent giant position; the February contracts would end up trading on next Monday. Accordingly, recent LME inventory raise can be counted on bear stock delivery, and the substantial bull receiving has become the promotion of the price.
Domestic spot is weak, but the prediction that purchasing has reached the bottom is the support of copper prices. News from the supply hand, conflicts about Zambian new mining fees and conflicts about tax refund threatened the mining investment—Lumwana copper mining which created 170,000 tons of output suspended, and news reflected that the government were hoping to solve the problem.
Technically, domestic overseas copper prices closed steady above 5-week moving average. Copper prices are likely to move upward towards 10-week moving average. The support line of LME copper is at $5,630, and the first aim is at $6,000. The support line of domestic 5-month copper is at 40,600 yuan, and the first target is at 42,800 yuan. At-the-money contracts and long-and-medium-term long positions can continued to be held.
LME 3-month aluminum rose on Thursday, closed up by 0.82 percent at $1,836/ton. Heads of Russian, Ukrainian, German and French reached an agreement about solving the problem of Eastern Ukraine, that, IMF would gave $17.5 billion to Ukraine. National Development and Reform Commission (NDRC) declared to promote major infrastructure, the PBOC released 160 billion yuan liquidity via reverse repo yesterday. On the industry front, China’s Ministry of Industry and Information Technology polled that the deficit of 2014 non-ferrous metal state own and state hold enterprises accounts for 67 percent of the whole industry. The waiting time of LME Jan. Detroit Metro warehouse aluminum shrunk to 579 days.
Overnight U.S. soybean closed up, influenced by the high sales data and surged related commodities. The export report revealed that the weekly net U.S. soybean sales is 745,000 tons, higher than the expected 250,000-450,000 tons. Brazilian institutes cut Brazilian soybean output to 94,600,000 tons from the former 95,900,000 tons. U.S. soybean kept waving among 950-1,000 cents, the information would be relatively peace in the coming week. Feb. supply and demand report had limited influence on the prices, and since the inventory data was lower, the market remained the weak pattern influenced by long-term supply forces. There are 2 future concerns, one is the forecast of U.S. 2015 soybean sowing area released late this month, and the other is the actual impact future South American weather on the output. Both of them could bring bearish pressure to the market, thus, depressed future price tendency.
Domestic soybean performance has been affected by the nearer holiday, domestic-made soybean remained weakly fall, and is recently waving around 4,400 yuan. Calculate according to current spot, selling would be triggered when the price surged to 4,450 yuan/ton, pay attention to the performance at this interval. Soymeal spot was steady, the quoted price of coast oil plants was above 2,850 yuan/ton. Purchasing demand lowered approaching to the Spring Festival, and oil plants paused gradually. Therefore, markets have fallen into a downturn in the short term. The pattern would mainly be weak and fluctuated before and after the Spring Festival.
Operation Strategy: hold light volume of positions before the holiday.
PP futures opened high and then fluctuated yesterday, opened at 7,800 yuan and closed at 7,843 yuan. The trading volume has cut 2,758 lots to 422,000 lots, and positions reduced 11,002 to 305,000 lots. On the upstream hand, FOB Korea propylene rose $8, and averaged at $823.5/ton. On the device hand, the spot domestic PP market tends to be stable as a whole, price waves are no more than 50 yuan/ton. Although part of petro-chemical ex-factory prices continued to correct higher, supporting the market, merchants and downstream factories exited the market gradually. Thus, the trading circumstance is lightening up. To cope with the incoming Spring Festival, investors left the market gradually and prepared to fight after the holiday. Therefore, the market would be steady. Take wires as an example, the main quoted price of Northern China, Eastern China and Southern China were 8,000-8,150 yuan/ton, 8,200-8,550 yuan/ton and 8,400-8,650 yuan/ton. On the Fundamentals hand, trading volume is light.
View the market as a whole, the price was fluctuating at 60-day moving average, but the narrow fluctuation has last for 5 days. The fight aimed at moving average lines would come up with a result in a couple of days. The volatile interval before the holiday is 7,500-8,000 yuan.
                                                                                    Dong LV (Investment Certificate NO. TZ008452)