Daily Report 260315 2015-03-26
Macro Economy
U.S. stocks significantly closed down yesterday, S&P 500 slip by 1.46 percent to 2,061/05 points till closing, Nasdaq fell by 2.4 percent, and technology and biology shares led the decline. The U.S. commerce department polled the U.S. Feb. durable goods orders falling 1.4 percent, far lower than expected 1.6 percent; similarly, Jan. durable goods orders data declined from 2.8 percent to 2.0 percent. Since Yellen eliminated the “patience” form the statement, the market predicted the Fed to postpone rate hiking. And today’s durable goods data has proved the prediction. Charles Evans, Chicago Fed chairman, considered that although the employment had improved so far, the inflation was low, thus, it was better-off to raise interest next year. While Atlanta Fed Chirman Dennis Lockhart declared to vote for rate hiking as late as September. Concluding from the inflation and other aspects of the U.S. economy, the rate hiking is most likely to happen in September.
On the domestic front, Prime Minister Li Keqiang hosted the executive meeting of the State Council, deployed to promote “Made in China 2025” in order to upgrade manufacturing. The later strategies would focus on high-end device manufacturing, energy conservation, environment protection, new energy resources and biologic pharmacy. Besides, the meeting followed new progress of the restructuring of (China North Locomotive and Rolling Stock) CNR and (China South Locomotive and Rolling Stock) CSR, emphasizing state-owned assets and corporations to reform and optimize resource allocation, further relative revolutionary measures are projected to be extended.
Domestic AU1506 gapped up then edged down during the night session, breaking through the resistance at 20-day moving average. The tendency is still bearish, but since it is at a periodic bottom, can contain rebound correction. The U.S. Feb. durable goods orders was far lower than the expectation, and the weak economic data sparked worries about rate hiking in June, thus, the U.S. dollar index fell back, support gold prices dominated by U.S. dollar. The ECB QE fueled the euro rally while pressured U.S. dollar.
On the other hand, the ECB decided to help Greece again, lowered risk aversion, Gold ETF cut 1.19 tons to 743.21 tons overnight, indicating that though gold prices reversed, funds sell at rallies and undervalued later gold markets. Generally, weak and volatile U.S. dollar correction offered an opportunity for gold prices rally, but still, it is a long way to go with many resistances.
Operation strategy: hold long positions built in at 237.5 yuan, the price might pull back intraday, and is projected to extend the rebound, the upper target is 247.5 yuan.
Domestic AG1506 rushed high and then fell back during the night session, short-term moving average arrangement was bull and upward. The reverse momentum seems not abundant, had strong resistance at 3,700-3,750 yuan.
Operation strategy: hold reverse opinion while trading, take profit appropriately at 3,700 yuan of long positions built in at 3,530 yuan last week, and hold the remaining. Short-term volatility was intensified, it is better-off to wait and see intraday.
PP futures opened low and fluctuated yesterday, opened at 8,201 yuan and closed at 8,176 yuan; trading volume rose 617,000 yuan, and positions grew 364,000 yuan. On the upstream hand, propylene prices leveled off. On the devices hand, Maoming Petrochemical started to maintain yesterday, led to a tight supply. On the spot hand, domestic PP market prices edged up today. PetroChina raised prices, promoted the supply of goods to a higher platform, and inspired merchants at the same time. PP futures moved at lows, led to downstream businesses’ unwillingness to take goods. Accordingly, merchants raised the price in a small range, to observe the reaction of the market. downstream enterprises was prudent and holing wait-and-see attitude, not proactively to take goods. Market inquiry had no significant changes, trading volume turned to be light yesterday.
Current main quoted prices for wires in north, east and south markets are 8,450-8,650 yuan/ton, 8,600-8,800 yuan/ton and 8,600-8,800 yuan/ton, respectively.
Current prices are at technical callback interval, while the moving average system is bull, plus the generated MACD gold cross, the overall market is bull.
Operation strategy: we suggest investors to wait and see, wait for band long opportunities, the main support recently is at 8,000.
                                                                               Dong LV (Investment Certificate NO. TZ008452)