Daily Report 020315 2015-03-03
Macro Economy

In domestic market, data released last weekend indicated that the China Manufacturing PMI in February was 49.9, which is slightly higher than the previous figure, however, still under 50. While the price of international crude oil seems relatively stable, previous investment on infrastructure construction and reform policy have be promoting the economy. However, the weak demand remains. It is then expected that it is too early to say that the economy will rebound soon. Besides, the People’s Bank of China decides to cut the RMB lending rate and the benchmark deposit rate since March 1st, 2015. It is also the second rate cut in the past three months. On the whole, the risk of the increasingly drop of economy is gradually lowering. However, the downward trend of economy has not been changed. It is still necessary that the easing policy be released afterwards.


Main contract of domestic gold AU 1506 was up slightly in the night session last Friday. It is important whether the 60-day moving average can stay above RMB 247.5. In terms of trends, the gold shows a downward drift based on the weekly trend lines. However, bolster effect was found around RMB 244, which may leads to fluctuations recently. As for the 250-day moving average, it is hardly likely for it to break through RMB 252. Previous short positions opened at RMB 254.5 could be closed. Investors are recommended to hold short-term long positions if the gold is strong during the intraday trading, with stop-loss set at RMB 246 and stop-profit at RMB 250. The situation between Russia and Ukraine is sharpened due to Russia’s former vice president was assassinated recently. This then lead to an increase of risk-aversion sentiment, which bolsters the price of gold. Besides, the US dollar index is back to 95 again while the Fed’s attitude toward rate hike is still not clear.


Main contracts of domestic silver AG 1506 closed flat in the night session last Friday. Strong bolster was found near the 60-day moving average at RMB 3590. In terms of trends, silver is still following the trend of gold. It is expected that the silver may fluctuate and drop afterwards. Previous short-positions opened at RMB 3800 could be held. Defensive moves should be prepared at RMB 3700. In short term, the silver is likely to fluctuate between the region from RMB 3550 to RMB 3700. Sound investors are recommended to focus on operational opportunities after the break
through of that region.


Last Friday U.S. soybeans continues going up, but its futures price broke away from its high quotations, which boomed up by the Brazil strike. Currently U.S. soybeans are stable fluctuating above $10. In domestic market soybean meal has strong performance;The price of soybean no.1 contract is fluctuating under RMB 4300 per ton, for short term it appears weak.
The spot quotation of Soybean meal increased around RMB 3000 per ton, we suggest paying attention on the resistance line above RMB 3000. In terms of operation, long soybean meal which is located around RMB 2800. For soybean no.1 contract, we suggest wait and see.


Last week PP futures appeared as shock upstream. In terms of upstream, during the Chinese New Year FOB Korea propylene increased sharply; current average price is $915.5 per ton. For devices, current operation rate of PP is 90.18%, which increased slightly compared with the number before holidays. For inventory, compared with last year the same period, it is 117.17% of last year.
In terms of spots, the price of PP futures increased; part of petrochemical enterprise increased their ex-factory price of crude oil, which to certain extent it enhanced the support of market cost. PP futures operate in high price, which boomed the market even further. The merchants are influenced by the cost supporting reason,most offer are testing upward trend.
In general of the quotation, currently the moving average lines appear like long positions;MACD exposure is upward,but the red pillars shrinks, which suggest it does not have enough momentum to increase. Currently we suggest to set the support line around RMB 8600-8700.
Dong LV (Investment Certificate NO. TZ008452)