Daily Report 240315 2015-03-24
Macro Economy
Investors have weighed the statement of the Fed and the lower-than-expectation real estate data. Consequently, the U.S. stock market edged down yesterday. Until the closing, S&P 500 fell 3.64 points, or 0.17 percent, to 2,104.42 points. On the statistical hand, the annual U.S. Feb. existing home sales was 4,880,000, 1.2 percent increase month-on-month, from January’s 4,820,000. Cold weather, deficit supply and high prices were main reasons for the sales lower than expectation. The Fed’s vice chairman Fischer confessed that rate hiking could possibly happen in the year, while the Fed did not plan for an exact interest raise project. After the first raise, the Fed would assess the monetary policy at every meeting, and further raise or cut the rate. The most likely interest raise time has changed from June to September according to the weak U.S. economic data and strong U.S. dollar index since Q1, and the Fed’s statement alteration. Besides, the ECB president Draghi affirmed the QE in euro zone, which has inspired Euro while pressured U.S. dollar.
On the domestic hand, Shanghai accumulation fund management center is working on enhancing the management and improving fund utility. News from the press said that Shanghai accumulation fund loan limitation might be raised by 50 percent, as 700,000 yuan individually and 1,400,000 yuan for one household. Launched policies of real estate industry is accord with expected, and we consider that there needs more economic policies for the status quo.
Domestic AU1506 extended the rebound during the night session, met stress at 20-day moving average of 241.5 yuan. Mainly take profit for mid-term short positions built in at highs, hold short-term long positions broke through 10-day moving average of 237.5 yuan intraday, if effectively break above the resistance at 241.5 yuan, the upper target would be 247.5 yuan. the statement of the Fed kept pressuring U.S. dollar index, while on the other hand, the ECB president Draghi confessed the positive effect of QE, thus, Euro rebounded and pressured U.S. dollar. The U.S. Feb. existing house sales was lower than expected, and the Fed’s data pattern indicated that the economic indicators had not been improved a lot, those, taken together, supported gold prices. On the other hand, pay attention to the negotiation between Greece and Germany, and beware of risk aversion triggering gold price rebound. On the funds hand, funds still does not think highly of gold prices, Gold ETF positions cut 5.37 tons last Friday and remained the same for three days.
Operation strategy: the overall pattern is bear. Since short-term status is at a periodic bottion, and rebound correction may appear.
Domestic AG1506 extended the rebound, short-term moving averages’ arrangement was bull.
Operation strategy: for previous short positions, defense at 20-day moving average, operation as the trend would rebound in the short term. Take profit appropriate number of long positions built in when breaking through 3,530 yuan at 3,700 yuan; the short-term resistance interval is located at 3,700-3,750 yuan.
Stock Index
Stock index continued to surge yesterday, the whole market was rising. Current factors that bolstering the market growth are simplified administration, empowerment, innovation and entrepreneurship, which equals to release productivity, and initiate new growth and business points; monetary policy is expected to be loose in order to lower costs of enterprises. Simultaneously, commodity bear market lowered enterprises’ cost and benefited relative businesses. On the industry hand, ministries and commissions launched 15 policies in one week, indicating the country’s desire of promoting revolution and development. Information all-around appears to be bull, and there has remaining spaces for rise. The Industrial and Commercial Bank of China (ICBC) launched internet finance, might drive domestic financial giants actively greeting the internet to improve innovation. The prime minister promised to widen service admittance. The National Development and Reform Commission actively guided funds to flow to innovative enterprises. All those measures indicated the state is actively creating an innovative business platform, to release productivity and to improve production efficiency, industries may generate a simulative economic mode.
Operation strategy: stock index surge was too high in the short term, be cautious chasing the rallies, the overall trend is bull.
The U.S. soybean extended the rebound overnight, the market is still supported by the decreasing U.S. dollar. The fundamentals is flat, market focus is the sown report at the month-end, and this is a guide of future price movement.
On the domestic hand, DCE oil and meals reversed associated with overseas markets. Soybean No.1 was weak; soymeal actual prices slightly rebounded, main quoted prices were 2,980-3,040 yuan/ton. The operation rate of oil plants were good, soymeal inventory obviously returned. Domestic-made soybean physicals kept declining, fell 2-5 cents/jin in many markets last weekend. The lower price in Amur River is 3,800 yuan/ton, and 4,060 yuan/ton in higher price, plunged compare with Monday, indicating weak and bearish view about production areas. Since the sales process in producing area is slow, price-falling risks may appear in later trading due to concentrated selling. Thus, Soybean No.1 has been affected by lower warrants’ cost, and is projected to remain weak and volatile.
Operation strategy: conduct short-term operations or just wait and see.
Polypropylene futures opened high and went higher yesterday, PP1505 opened at 8,482 yuan and closed at 8,692 yuan, trading volume increased 154,000 lots to 718,000 lots and positions cut 19,625 lots to 233,000 lots. PP1509 opened at 8,000 yuan and closed at 8,171 yuan. Trading volume rose 202,000 lots to 537,000 lots, positions grew 16,046 lots to 313,000 lots. On the upstream hand, propylene prices leveled off. On the device hand, maintaining devices are the same as previously, no significant changes on the operation rate. On the spot hand, most domestic PP prices edged up yesterday. PP futures opened high and went higher rapidly, inspired investors, but investors are being prudent and take wait-and-see view towards PetroChina. Following up, PetroChina North China raised the ex-factory price, and PetroChina Mid China raised the copolymerization price, merchants shipped at high-price. Downstream factories inquiry was better than former, trading volume is still low.
Take wires as an example, main quoted prices in north, east and south markets were 8,200-8,450 yuan/ton, 8,500-8,600 yuan/ton and 8,450-8,550 yuan/ton. May contracts MA system was bull, and MACD generated a gold cross, the overall tendency is rising. However, the resistance at 8,700 yuan is strong. If overnight crude oil does not plunge, the prices would break through previous gap at 8,700 yuan, and has remaining rising spaces. September contracts MA system support is strong, MACD green column shortened, the tendency is strong and volatile.
                                                                                       Dong LV (Investment Certificate NO. TZ008452)