Daily Report 090715 2015-07-09
Macro Economy
Yesterday the U.S. stock market fell, market was worried about China stock slumped may damage growth of Chinese economy and, the Fed meeting minutes showed that decision makers admitted overseas crisis would constitute potential risks; S&P 500 index dove 34.65 point or 1.47% to a 4-month low at 2046.69 point. U.S. finance minister Jacob Lew indicated Chinese stock slumped would not bring risk to U.S. financial. Overall, Fed is continuing trying to lead market postpone the rates raising anticipation, while due to the Greek debt issue uncertainty and the possibility of chain reaction brought from Chinese stock slumping, Fed continuing maintain a cautious attitude. The U.S. dollar index and treasury yield fell in consequence, gold price increased. As for Euro side, Greece is applying for Euro stabilizing mechanism 3-year-loan and commits paying all debts. Greece government will close the bank till next Monday to extend the capital control. Euro central bank stated would remain the Greece bank industry ELA ceiling at €88.6 billion; Euro leaders indicated were considering provide humanitarian aid to Greece, it was more and more harder to accomplish economy aid programme, the Grexit risk was in a high level.
In domestic, the slumping from stock starts extending to commodity in the recent weeks. Under the circumstance of U.S. dollar is in a bull trend, Greek crisis continues rumbles on and Chinese macro no plainly improving, the slumping of stock and commodity market further shatters the investors’ confidence. The behavior of government rescue did not slow down stock market falling; People's Daily issued commentary that the Chinese bailout was not for soar the stock market but for prevent systematic financial risk; we regard the bottom line from decision levels was did not imperil to bank system, above which the bailout was for stabilized instead of raising the market, hence need to be cautious of it. In addition, National Bureau of Statistics of China will publish June inflation data on 9:30 this morning. It is predicted CPI will increase 1.3$ on year to year base, May is 1.2%; PPI decrease 4.6% and flat with May decreasing range, the data should be focus on.

Wednesday domestic copper price appeared “V” pattern momentum, copper price profit two-thirds losses of recent three days. From market dominant factors, variations exits in macro side play a key role. If Greece officially applying for three-year-long third bailout in Wednesday, the U.S. and IMF will try to pressure the European Union leaders to relief Greek debt and avoid Grexit. Previous EU leaders indicated Sunday will be the deadline, otherwise will force Greece exiting Euro. Chinese stock market took a series of policies, for nation aid there was lots histories, releasing market risk will slow down the market pressure.
Back to the copper market, LME spots discount $13, inventories reduce 925tons, domestic copper spots premium RMB250-300, the import window still opens. Recent the news from copper supply is still worth attention on, first is Chili copper yields reduce again 60,000tons; second is Chinese processing charges decrease 10%, considering of this year copper yields predicted to reduce over 200,000tons, if the macro stabilized, current copper price has already over falling. Technically, copper price get bolster after slumping, we tend to consider recent copper price will further volatile in low points, resistance is $5600 and RMB 40,500; if above price may be broke through, the falling of copper price will over.
Overnight U.S. soybean slightly rallied, boosted from long holdings when in low point, the gloomy mindset in market is détente. In domestic, market immense turmoil over past two days, soybeans has thoroughly rid of effect from fundamental, soybean No.1 contract night session rallies after yesterday falling; although recent domestic soybean spots tendency is weak and lack of demand, the futures price overacts, futures price discounts; hence as the fundamental perspective, there is no value to shorten soybean No.1 contract.
Reaction in soybean meal spot market is much better than futures, yesterday lots of areas fall RMB 30-50/ton, dragged from futures market slumping; coastal oil plant operation rate is high but, there are lots of non-execution contract previously, in short period partial oil plant will mainly focus on executing contracts, meals dragged from entirety commodities panic dropping, short period volatile will be huge. As for operation, we recommend observing in short term.
                                                                             Dong LV (Investment Certificate NO. TZ008452)