Daily Report 020715 2015-07-02
Macro Economy
Yesterday U.S. stock market raised, investors waited for U.S. June nonfarm employment report publish in Thursday; a sign hit employment market was booming; in addition, Greece implied preparing compromise in bailout negotiation also formed a thrust. S&P500 closing at rise 14.3 point or 0.69% to 2077.42 point; Euro stock market raised following U.S. As for data side, ADP published U.S. enterprises June employment amount increased 237,000, higher than expected; this report may indicate June newly increased nonfarm employment amount published in Thursday will over the in line expectation of 230,000pieces. Besides, U.S. Institute for Supply Management stated June manufacturing index increased to 53.5 from May 52.8, indicated manufacturing expanding speed hit a five month fast.
In Euro, Greek Prime Minister called on the electors to blackball bailout scheme in referendum, who implied willing to accept the newest creditor scheme and claimed the referendum will not relate to if Grexit happen or not in the early time. Poll showed “PRO” ratio was 47.1% and “CON” ratio was 43.2% of Greek referendum. Euro Central Bank stated would continue supplying emergency liquidity assistance to Greek bank institutions.
Overall, U.S. economy further revolving, booming data drove U.S. dollar index soaring; meanwhile Greece showed willing to compromise made gold hedge asset losing attraction. But before Greece signing final agreement, continuing on the alert for financial market volatile risk.
As for domestic side, China June official manufacturing MPI is 50.2, flat as May’s; still is the highest data from last November and lower the prediction 50.4. To put this in perspective, production index still above 50 but, order data fell back; showed demand improvement was unsteady though seasonal was a partial factor. Overall economy continues in weaken steadily trend and, continues relying on the bolster from stabilizing growth policy.


Stock Index
Yesterday the rally trend ended, both Shanghai and Shenzhen market overall more than 80 shares fell to daily maximum limitation. Futures index had large discounts, reflecting these fell to limitation shares still exited downward scope. This slumping substantially was market regarded prediction extremely unreal and, the major shareholders continuously reducing holdings; high points IPO were predicted to be listed in a huge amount; which terrified the assets. As for the aspect of stock market rising essence – prediction, market is starting to suspect prior predictions and speculation concepts; revolving requires for concentration of new predictions and concepts, hence current bailout measures can only be a short term effect and is hard to continuously effecting. On asset side, a great number of with funding investors lose extremely and are hard to continue.
If we say the market turned to bearish, that was the suspicion and hesitation to overall market reforming and transforming, we may not consider of it yet. But if there is no fresh news in later stage; only with old concept and limited evolving; lots economy problems continue developing; we do not eliminate that market confidence to reform and transform will gradually weaken, there is a deep scope foe downward. Overall trend is weak and do not expect of rally back.


PP
Yesterday PP futures continues volatile, opened at 8628 and ended at 8613, trading volume decreased 50,570 lots to 329,000 lot, and holdings decreased 8310 to 398,000 lots. In upstream, FOB Korea PP price fell $10, average price was $960.5/ton. On spots side, yesterday domestic PP market mainly in stable. Petrifaction most major areas ex-works price are stable which forms certain cost bolster to marker. PP futures in a high position had limit effect on boosting market mindset. Merchant shipping in market price and partial plants receiving in low price; no plainly improvement on initiative aspiration from downstream plants, market inquiry increasing and, trading is mainly on merchants receiving.
Yesterday main quotation of wires, north market was RMB 8500-86000/ton, east market was RMB 8600-8800/ton and south market was RMB 8750-8900/ton.
As for operation, current price continues volatile around moving average system, MACD red column shorten. Recent trading volume and inventory both decreased, it’s hard to form a trend unilaterally.


                                                                     Dong LV (Investment Certificate NO. TZ008452)