Daily Report 270815 2015-08-27
Macro Economy
Yesterday US stock market rallied after continuously slumping; three stock indexes all ended high; S&P 500 index increased 72.9 point to 1940.51 point at ending, increased scope created a highest level from 2011 at 3.9%. As for data in US, July durable-goods orders increased 2%, was plainly high than estimated down 0.4%; June data also revised up at increased 4.1%. Combine with prior situation, output growth downward trend from industrial sector might had ended and, durable-goods orders revealed that demand started improving, manufacturing industry field gradually booming.  Dudley, the president of New York Federal Reserve indicated that, US economy was threatened by crude oil price and other factors, global fluctuation as well weakened the reason of interest rate rising in September; he hoped Fed may raise interest rate within this year; meanwhile, Dudley anticipated the US GDP in second quarter would “extremely revise up”.
In domestic, PBOC launched a RMB 140 billion SLO operation to inject liquidity, time limitation was 6 days and weighted average bid winning interest rate was 2.3%.  Li Keqiang, China’s prime minister chaired executive meeting of the State yesterday, to ensure speeding up financial leasing industry development measures, deploy further clearing and regulating charges at import and export link. Taken together, driven from continuous policy, we recommend not to over pessimism at economy but, hammer would exist in a short time.
Wednesday domestic and overseas copper price both dropped, bolster from interest and reserve reduction was limited. Wednesday China stock market was weakened as well, yet temporally stop-loss had certain spurred the market, intraday global stock market were somewhat stable. On fundamental side, Wednesday LME spots were slumped from premium $28 to discount $28; meanwhile inventories increased 130,000 tons which varied recent bolster background. Consumption from domestic, recent merchant premium to $100-130, on account of yuan devaluation, import cost increased had bolstered domestic copper price and, caused import demand increased. But domestic consumption was still weak, Wednesday was discount 70 to flat. Technically, recent copper price was fluctuated in low point; LME resistance was 5070, crucial resistance was $5340; in domestic was RMB 39,500. Before copper price is capable of raising over above price, it will hard to get rid of weak trend.

Soybean volatile in night session, market was still bearish in a short time. Soybean spots in northeast area was weak out of stabilize, under the impact of upcoming new grain, hammer on spots further raising in a short time increased but, down scope in short time was estimated to be limited.
Soybean meal spots were stable in recently, there is no plainly impact on spots market from fringe market; but recent overseas market weaken trend made domestic oil plant quoted in cautious. Market still shown tightened North inventories, huge inventories in south China and East China; oil plants in north plainly supported price and trading was in good performance, most oil plants were mainly executing prior contracts. Along with port arrival amount increasing, hammer on soybean supply side still existed. We recommend stay in shorten mindset on operation.
Yesterday PP futures opened up high and went low, opened at 7440 and ended at 7364, trading volume decreased 91,656 lots to 408,000 lots; holding increased 5982 lots to 229,000 lots. In upstream, FOB Korea propylene decreased $40, average price was $710.5/ton. On spots side, yesterday domestic PP market was in weaken consolidation trend. PP futures opened high and went low continuously hammering market momentum. Most merchants shipped in market price and, firm offer mainly on profit surrendering. No plainly improvement on initiative receiving demand from downstream plants, most of which receive based on production status, momentum of observing was think in the market; trading volume was on rigid demand.
For instance of wires, main quoted prices of north, east and south markets are RMB 7700-7800/ton, RMB 7900-8000/ton and RMB 7850-8000/ton, respectively.
On operation side, current moving average system ranged in short; MACD green column extended as downward trend; yet bolster at 7000 was plainly. We recommend prior short positions can be further holding in cautious.
                                                       Dong LV (Investment Certificate NO. TZ008452)