Daily Report 050815 2015-08-05
Macro Economy
Yesterday US stock market dropped for the third days, performance from Allstate and CVS Health was disappointed, AAPL price further retraced, Fed officers to rate raise as well exacerbated stock market volatile. S&P 500 index closed down 4.72 point or 0.22% to 2093.32 point. As for data side, US plant orders increased 1.8%. Lockhart, the Atlanta Federal Reserve Bank president indicated, September would be an appropriate time for Fed raising rate,  only if the future data performance is terrible, postpone the rate raise after September would be appropriate. This declaring tensioned market, US stock and debt dropped afterwards and US dollar soared.
In Euro side, June PPI in Euro zone decreased 0.1% compare to last month, forecast was zero growth, in May was zero growth; on year to year base decreased 2.2%, flat with forecast, in May was decreased 2%. We considered the crude oil slumped was the crucial reason of June Euro zone PPI dropped. In addition, Greek government is trying to reach an agreement with creditors on the new bailout within two weeks, to pay ECB €3.2 billion which will expire on 20 Aug and, without further bridge financing; financial market may have fluctuations but it is predicted Greek may gain the payment to pay back debt.
In domestic, Central Bank reiterated continuous implement sound monetary policy, flexible using variety monetary policy instrument and, presetting, fine tuning in time to maintain proper liquidity, to realize the rational growth from monetary credit and social financing scale. IMF states, there will be a huge work on assessment of RMB brought into SDR, suggested to postpone the adjustable effective date of SDR currency basket nine months to 30 September, 2016. In addition there is news, China is planning to directional issue at least 1 trillion RMB dedicated bond through policy banks, on constructing infrastructure to boost the economy. Overall, there will be no huge change on easing policy in late period but, may appear a certain variation on easing channel, need to be cautious on interest rate reduction policy.
 
 
Soybean
DCE soybean strong out of fluctuation in night session, driven by overseas market; soybean No.1 contract rallies under the spots raising, domestic soybean spots continues strong in these two days, raising scope in most areas reach RMB 80-100/ton, market still boosts from lacking of high quality soybean and import soybean hard to ship in port; Currently, spots price start to launching, in the future two months domestic soybean will in shortage cycle, and predicted to bolster the futures price, tendency will be independent of soybean sector.
Soybean meal spots stable in most areas, futures price in strong trend and has not influenced by spots level; the factor on hammer is huge port arrival amount and sluggish demand, we predict meals tendency will in weak volatile in a short period. We recommend hold slight positions in short term or wait and see as for operation.


PP
Yesterday PP futures opened up low and went higher, opened at 7695 and ended at 7841, trading volume increased 8412 lots to 294,000 lots, holding decreased 9994 lots to 166,000 lots. In upstream, FOB Korea propylene edged down $2, average price was $845.5/ton. As for spots side, yesterday domestic PP market continues dropping. Partial petrifaction regions EXW is in listing price, which make the bolster to market costs further weakening. PP futures rallies after opening low, boost effect to market sentiment is limited. Merchants ship in market price, sales in profit surrendering. Aspiration of receiving from downstream plant decreased, investing and trading momentum was thin.
Current main quotation of wires, north market was RMB 7750-7950/ton, east market was RMB 7800-8000/ton and south market was RMB 8000-8200/ton.
As for operation, current moving average system still permutes in short, MACD exposure extends as bearish formation but, contract 1509 is in the prior costs compact area, crude oil rallies, we recommend pay attention on the risk of chasing short, stop-profit moderately and notice the rhythm of month switching .  
 
 
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