Daily Report 290715 2015-07-29
Macro Economy
Yesterday US stock market ended up high and stopped the one month continues dropping, which benefited from company performance was better than estimation and China stock market downturn slowed down. S&P 500 index ended increase 25.61 or 1.24% to 2093.25 point. The latest data revealed, US home-ownership rate in second quarter decreased 63.4%, created new low in nearly 50 years and, rental house vacancy rate decreased to 6.8%, created new low in 30 years; US S&P/ Case-Shiller Home Price Indices of 20 pieces cities in May increased 4.9% on year to year base, lower than estimation 5.6%; Conference Board published US July CCI dropped the most in near 4 years. Setbacks along reviving from US real estate market were in expectation, home-ownership rate was low and rental house vacancy rate fell might stand for a potential reviving in late period. FOMC will release monetary policy statement at 2AM on 30 July Beijing time, it is predicted rate raise will not be in this meeting but reveals signal of rising time, pay attention on it.
On the European side, spokesman of Athens stock exchange indicated that ECB approved proposal of Greek stock trading, one step closer to Greek stock market reopen. Previously, the Greek Prime Minister Tsipras had indicated on 28 June that, Greek implemented capital control all across the nation, all banks and securities exchanges suspended business. It may bring sharply fluctuation to domestic securities market that Greek stock market reopens but, the impact to external will be limited.
On domestic side, RMB internationalization has stepped further, clearing house LME Clear under LME announces has approved by BOE to adopt CNH as qualified cash collateral, RMB internationalization further accelerating.

 
Stock Index
Yesterday stock index volatile, securities traders, banks and blue-chips strongly bolster the market. The reason of recent falling may be: first is market concerns on quitting from Nation rescue, without underpinning, no confidence in both hold up in prior and bid on rally in later, market is in strong selling trend. Second is China real economy continues weaken, not like the performance in stock market and bottom out from reform and transition as the good anticipation. Although we predict to be booming in the future but the reality there is no plainly hope from the past half year, market is losing the confidence.
On the positive side, nation will continue rescue the market and do not give up right now.  Current price fell to the prior low point; IH fell through prior low, there is certain scope for bargain hunting and may be a slight rally. But if the price soared the stock market selling momentum would be enhanced, hence it would be hard to raise back. There is a huge possibility to fluctuant weaken in the future.
 
 
Copper
Tuesday copper price started to rally, LME ended at 5308, increased $111. Domestic copper price ended at 38690, increased RMB840. Intraday copper price rallied had stopped the downturn. In the atmosphere, hammer from macro side seemed to be released. Which reflect in two aspects, one is in China, most Chinese ministries declare to stabilize, national team rescues market that the market concerns on China stock crash has released; the other is in US, the prediction on US interest rate rising varies again,  even there is prediction that US rate raise will not happen in this year. We hope the macro side may calm down as well, and in this way, effect from fundamental side may appear. Tuesday LME spots discount to $11, inventories increase 1200 tons. Domestic spots premium at RMB 200-350, import window still opens.
The latest news, copper yields in partial producing country may be hammered again since the drought. Zambia has decreased power supply to northwestward mineral occurrence, mines of Kansanshi and Sentinel under First Quantum Minerals has been influenced. The production goal of this enterprise is Kansanshi copper 260,000 tons, Sentinel copper 130,000 tons, respectively. Papua New Guinea copper mine under OK Tedi has been shut down temporally since drawdown; the yield in last year was 760,000 tons. In addition, two mineral occurrences from Chuquicamata and Andina under the striking Chile Codelco were changing shifts, which had been impacted as well. In conclusion, we still consider that relative to the fundamental side of copper, current copper price is low, whether macro side is stable is the focus to market.
Technically, copper price will fluctuate at $5200-5500 recently; in domestic is RMB 37,500- RMB 40,000. We recommend waiting for further plainly market as for operation.  
 
 
Soybean
Soybean No.1 contract continues rally, domestic soybean spots strong in stabilize bring good news to market; spots rally mainly because of increasing from high quality soybean appears, which release the downturn market sentiment; now is entering the seasonal cycle of shortage, which will bolster the futures and spots but, shall not over bullish; first is cause the overall performance from agricultural products is poor, second is demand of soybean No.1 contract is weak.
Soybean meal spots dropped for the second day to RMB 30-50/ton, quotation in most area was RMB 2660-2720/ton, along with US soybean fell again, bearish sentiment in domestic was more and more plainly, and soybean port arrival amount in August to September from market anticipation was huge, hammer on market was hard to eliminate; treat the meals tendency in retracement for a short period. We recommend hold slight short positions in short terms as for operation.
 
 
PP
Yesterday PP futures opened up low and went higher, opened at 7720 and ended at 7898; trading volume decreased 56,196 lots to 415,000 lots, holding decreased 18,756 lots to 195,000 lots. In upstream, propylene price leveled off. On spots side, yesterday domestic PP market went down slowly, most prices down RMB 50-100/ton. EXW in partial petrifaction further falling, bolster to cost of supply weakened and further enhancing the bearish sentiment, merchants shipped following downward trend to promote trading. No plainly high volume in firm offer from downstream plants, poor trading exacerbated declining tendency, overall investing and trading is thin.
For instance of wires, main quoted prices of north, east and south markets are RMB 7900-8000/ton, RMB 7950-8150/ton and RMB 8050-8300/ton, respectively.
As for operation, current moving average system permutes in short, MACD green column extends as downward trend. But yesterday price opened up low and went higher, there is slight bidding momentum in the market, we recommend prior short positions can stop-profit properly.
 
 
                                                                      Dong LV (Investment Certificate NO. TZ008452)