Daily Report 170715 2015-07-17
Macro Economy
Yesterday U.S. stock market ended up high; previously Greek parliament had passed austerity proposer, Netflix and Citigroup price raised under the driven from superior performance. S&P500 index closed at raised 16.89 point or 0.8% to 2124.29 point, close to prior high point; Nasdaq Composite closed at 5163 and hit the historical high level. For data perspective, last week the U.S. initial jobless claims decreased 15,000 people to 281,000 people – the first decreasing in this moth; Euro zone June CPI raised 0.2% on year to year base, Yellen the Federal Reserve president indicated during yesterday testified at senate that they tend to have austerity policy gradually and prudently, it is risky for austerity too soon or too late.
In Euro side, Euro central bank maintain the major three benchmark interest rates, bank governor Draghi reiterated would continue easing policy till inflation had persistent adjustment. He also indicated there is no doubt of Greece place in Euro zone, Greece need debt write-down; central bank would up ceiling the ELA to €900 million. Finance minister of Euro zone approved €7 billion bridging loan to Greece for helping paying to Euro central bank €3.5 billion which would expire on Monday. German parliament will vote for Greek bailout scheme in Friday, Merkel appeal Party to vote affirmative. German Finance Minister Wolfgang Schaeuble indicated the only way for Greek earning debt write-down is Grexit and doubted the capacity of accomplishing third round bailout negotiation. The Greek finance ministry extended bank closing period to 19 July.
Overall, the U.S. employment status is steady; statement from Yellen is lean to the hawk and is likely to deliver a message that interest rate will raise in this year; risk of Greek debt further falling, market attention will gradually back to fundamental side in US and Europe economy, US dollar will maintain strong trend.
DCE soybean was weak out of volatile in the night session; the slumped soybean No.1 contract spot market weakened the rebounding trend; price in partial Heilongjiang areas dropped, merchant inventories were high, actual trading was low, partial merchants urged to shipped and reduced quotation; current futures price was in a dilemma of ups and downs, lacked guidance from substantial subject.
Soybean meal resisted dropping; recent rising is rapidly, drives the terminal purchase and firms the spots; since this rebounding is in cost transmission, US market weak recently has affected the rhythm in domestic market; as for spots side, market performance is firm, huge amounts of non-executing contract in north areas, no hammer on oil plant inventories, aspiration of insisting price is strong, the spot price raises easily and hard to fall. Tendency is likely to continue strong out of volatile trajectory. We recommend gradually long in slight positions as for operation.

Yesterday PP futures fluctuant in low point, opened at 8171 and ended at 8124, trading volume increased 33,404 lots to 337,000 lots, holding increased 2,296 lots to 279,000 lots. In upstream, FOB Korea propylene decreased $10, average price was $845.5/ton. As for spots perspective, yesterday domestic PP market tendency is loose out of stable and hammers the confidence of practitioners, merchant ships in falling to reduce holdings, and the future market is confused. No improvement on actual purchase demand from downstream plants, plants continue moderately purchasing based on orders, investing and trading further stagnating.
For instance of the wires, yesterday mainstream quotation of North, East and South China is RMB 8150-8250/ton, RMB 8200-8400/ton, RMB 8350-8450/ton, respectively.
As for operation, moving average system gradually into short permutation, MACD green column extends, high possibility of weaken downturn in the future, we recommend continue shortening in high point.
                                                              Dong LV (Investment Certificate NO. TZ008452)