Daily Report 160215 2015-02-16
Macro Economy
The domestic market, the Jan. social financing was 2.05 trillion yuan—said People’s Bank of China (PBC)—for the third month increasing. Jan. New RMB loans were 1.47 trln yuan, a huge jump from the previous data. Jan. Jan. M2 growth declined to 10.8 percent year on year. Although new RMB loans exploded, social financing was lower than the expectation, plus the M2 growth hit a record low. Other than the problem of statistical caliber, capital outflow and low enterprise investment willingness are reasons the economy was low. In consideration of M2 decreasing, degradation and reserve cut policies are likely to be published.
Domestic AU1506 rushed high and then fell back last Friday, got support at 60-day moving average of 247 yuan in the short term, yet had pressure at 5-day moving average of 250 yuan.
Operation strategy: gold prices rebound seems to end up recently, slight reverse correction might appear after plunges, consider to be a downtrend with fluctuations. Hold short positions previously established at 254.5 yuan, risk averse investors prepare defense at 5-day moving average of 250 yuan, dominated by profit-taken before the Spring Festival.
Gold ETF cut 5.05 tons of positions in 5 days, indicating the cooling interests of funds against gold. Domestic markets close this week due to the Spring Festival holiday, and in consideration of the release of Jan. Fed’s reserve meeting notes on Wednesday, the market is projected to be volatile, we suggest investors to wait and see before the holiday.
Domestic AG1506 edged up during the night session on last Friday, got support at 5-day moving average of 3,630 yuan in the short term, yet strong pressure at 20-day moving average of 3,700 yuan.
Operation strategy: for short positions previously established at 3,800 yuan, prepare defense at 3,700 yuan, investors that are risk averse are better off primarily take profit before the holiday.
Overall, silver prices move along with gold prices, with weak financial attribute.
Stock Index
M2 growth was 10.8 percent at a record low, and Forex Purchase decline and economy downturn might be the main reasons. And new RMB loans, though high, have not exceeded the expectation, plus, both CPI and M2 are low, all these signs indicate that the economy might be worse than predicted. This, at the same time, has initiated the market to believe there is another flow of easing policies. In the background of enlarged structural adjustment for the whole year of 2015, traditional blue chips obtain a vague prospect that can hardly be foreseen, if the economy keeps going like this, and such fiscal stimulations proceed quietly and continuously, then new high is hard to be realized viewing from the midline.
Stock index created a rally and then fell last Friday, and sank into fluctuations since then, the volatile interval was 3,400-3,500 yuan.
Domestic copper rebounded after the shock last week. The spot was weak, spot discount expanded continuously last week, even extended to 300-200 yuan. Large merchants entered the market and took the goods at low prices. Since most domestic consumers have gone on a vacation, the weakness of spot is normal. The key is whether consumption can be launched after the holiday.
On the supply front, Australian Olympic Dam Cooper mine (belongs to BHP) suspended because of 47 miners’ death, the output last year was 185,000 tons. BHP said that this mine would conduct a maintenance and repair this year, and thus cut 60-70 million tons output, which would affect copper mining supply with no doubt.
Technically, copper prices met resistance at $6,800, and may struggle at this status, pay attention to the effectiveness of the resistance, hold previous long positions.
domestic soybeans perform a festive mood, domestic-made soybean weakly falls, waves around 4,400 yuan recently for the futures prices. Calculate accordingly, selling would be inspired above 4,450 yuan/ton, stick on the performance at this status. News—there were some problems with Brazilian harbor shipment, which may impact the arrivals of Chinese market in March. This can be a stimulation of the soybeans after the festival.
Soymeal spot is still strong, quoted prices in coast areas were averaged above 2,850 yuan/ton. Light sale and purchase around the festival stabilize spot prices, soymeal futures prices have broken through the resistance at 2,800 yuan, and would remain strongly rebounding.
Operation strategy: in consideration of the Spring Festival holiday and the arrivals after the festival, leave the market with short positions.
PP futures broke above previous shocking interval and kept rising last week. On the upstream hand, FOB Korea propylene surged by $27 last Friday, and averaged at $850.5/ton. On the device hand, current polypropylene operation rate is approximately 90 percent, bit lower than last week, but higher than last month. On the spot hand, this week, domestic polypropylene market prices narrowly corrected, Sinopec is waiting and seeing where the price goes. Northern, middle and southern China regions raised the ex-factory prices by approximately 100 yuan/ton. But merchants, factories and logistics left the market gradually. The light trading volume led most prices leveled off.
Take wires as an example, the quoted prices of northern China, eastern China and southern China markets were 8,100-8,400 yuan/ton, 8,200-8,550 yuan/ton and 8,400-8,650 yuan/ton.
There was little news about fundamentals. Currently, prices gapped high and broke above 60-day moving average. It is projected that the 60-day moving average line will become a strong support line.
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