Daily Report 010715 2015-07-01
Macro Economy
Yesterday the U.S. stock market slightly rallied from the collapse of Greek debt crisis, S&P500 index rose 5.48 point or 0.27% to 2063.12 point; the performance in first half year was the worst from 2010. On Euro side, Greek bailout is going to expire in Tuesday and already apply for delay the € 1.5 billion IMF fund, which formed an actual default. Meanwhile Greece applies for a two-year-loan from ESM for specially pays back the internal and external debt. Euro group will convene a conference meeting in Wednesday to discuss the new bailout application from Greece but, Chancellor Angela Merkel states there is no negotiation before Greek referendum in 5 July. Currently, the two major issues in Euro zone after Greek default are: firstly after Greek default the other creditors may ask for repaying debt immediately which may cause a Greek interlink default; second is Greek default will lead the investors lose confidence of other risky countries and, bring a chain reaction; recently national debts in Span, Italy and Portugal already start falling. We recommend continue focusing on Greek referendum, if reform scheme cannot pass in the referendum, Greece will further stalemate the negotiation with creditors, which will bring an even larger risk to market.
As for domestic perspective, National Bureau of Statistics of China published June PMI of manufacturing industry in 9 o’clock this morning, market expectation was 50.4, May PMI was 50.2; June Markit manufacturing industry PMI final value will be published in 9:45 this morning, market expectation was 49.6 and in May was 49.2.
 
 
Stock Index
Yesterday stock index soared under the impact from government assistance policy and mindset. One side is the shorten holdings get thoroughly release after twice falling to daily limitation; other is each party under national leadership claims comforting market. Since this retracement is the difference between expectation and reality, and not all enterprises can turn into booming, market need to squeeze out bubbles. After this damage, partial market asset injured hardly and market confidence shattered; prior concepts were hard to continue effecting, the bull market need accumulation from time and concept. Yesterday rally is hard to continue but, there will be no slumping recently, hold the mindset of fluctuation.


Soybean
Intraday DCE market rallied after stagnation, though recent performance of DCE market was weaker than the oversea market, the strong rebounding of U.S. soybean increased domestic costs; in the market of cost-led, domestic market need to avoid shorten first; and soybean meal crush margins in a loss situation, the market price need to rise.
As for operation, we recommend take soybean meal long holdings, continue the mindset of bullish. Intraday opened up high which shall not excessive chasing the increasing and pay attention for the rhythm.
 
 
PP
Yesterday PP futures opened up low with volatile, opened at 8588 and ended at 8619, trading volume decreased 86,144 lots to 380,000 lots, and holdings increased 4254 lots to 406,000 lots. In upstream side, PP price remain flat. As for device side, four PP production lines with totally 800,000 tons capacity from SHENNING Group stopped operation at the same time, it is expected overhauling to late July. On spots perspective, yesterday domestic PP market overall is in a stable trend, the fluctuation is about RMB 50/ton. In the end of moth petrifaction price remains stable and gradual stops selling for settlement, practitioner mindset is stabilized and merchant mainly trading in market price, most of them are waiting for petrifaction price policy in early next month. Downstream demands maintain tranquility, plant continues purchasing in small quantity according to orders, the investing and trading is thin.
Main quoted wires prices of north, east and south markets are RMB 8480-8550/ton, RMB 8700-8950/ton and RMB 8600-8850/ton, respectively.
As for operation, current trading volume is decreasing, volatile range narrowing, moving average system bolster is plainly but, lacking of downward momentum. We predict recent price will continue volatile trend.
 
 
                                                            Dong LV (Investment Certificate NO. TZ008452)