Daily Report 070915 2015-09-07
Macro Economy
US stock market ended low in Friday, the employment report had not pointed out tendency of Fed; S&P 500 index dropped 29.91 point or 1.53%, ended at 1921.22 point. From data side, US August non-farm payrolls data increased 173,000 pieces and was lower than estimated 217,000 pieces; but data in June and July revised up, unemployment rate down to 5.1% as the lowest level since April 2008; full-time employments created record high; payroll data also improved. Richmond fed President Lacker also indicated US August non-farm report was rather strong. The IMF Chief Lagarde indicated that before Fed raise interest rate, employment market and inflation need to be assured strong enough. Overall, this employment data was relative strong and indicated further improving on labor market and, estimation of interest rate rising in September enhanced; yet from another perspective, inflation has no plainly rally and we consider there was higher possibility of interest rate rising in December.
As for domestic side, Zhou Xiaochung, China's central bank governor, indicated on the g20 Ankara meeting, that there was no substantive change on Chinese economy fundamental side; RMB had no long term devaluation basis, RMB against US dollar had tended to stabilize; adjustments in stock market were roughly in place; financial market was expected to be more stabilized. Lou Jiwei, the finance minister stated, growth was estimated maintain at 7% and, was likely continuing for 4-5years; structural reform would be focused on, would increase total factor productivity; use reform dividend to hedge vanished demographic dividend; further implementing positive fiscal policy, central government budgetary spending was estimated growing about 10%; by increasing the hand over specifically state-owned profit ratio and other methods to recover financing gap. In addition, 7 September is the Labor Day in US and Canada, the financial market in US and Canada will be closed for one day; Us stock market and Toronto exchange will back to regular trading in 8 September (Tuesday).


Copper
LME copper price rallied after slumping during Chinese market closing; copper price had challenged $5300. LME copper spots premium dropped, in Friday was $11.75; inventories fell for four continuous days, in Thursday was 355,900 tons, decreased 153,000 tons within one week; domestic inventories increased 5664 tons in last week at 123,000 tons. As for supply side, news on 4 September morning, Freeport will stop half of El Abra copper mine crushing and stacking production on 1 September and, producing activity was estimated to be recover in mid September. Copper output in this mine was 162,000 tons. From CFTC data side, fund decreased holdings in short and, net shorten decreased to the lowest point since mid June. Technically, LME resistance was $5300, in domestic was RMB 39700; we estimated that short term copper price would fluctuate in low point. We recommend observing on operation and waiting for clear copper price.
 
 
 Dong LV (Investment Certificate NO. TZ008452)