Daily Report 090915 2015-09-09
Macro Economy
Along with China stock market stabilized and stopped four continuous falling tendency yesterday, overnight European and US stock market and commodities soared; US three main stock indexes surged, S&P 500 index raised 2.5% or 48.19 point and closed at 1969.41 point, created a second large single day increase range within this year. Commodity exporter currency also soared driven by the impact, exchange rate for ZAR, AUD and NZD all raised over 1.3%. On data side, US July consumer credit increased $19.1 billion and exceeded estimation, prior value was revised to increase $27 billion. Fed August Labor Conditions index raised 2.1 point; in July raised 1.8 point. In European side, Euro zone second quarter GDP increased 0.4$ on monthly basis, higher than 0.3% initial value, with mostly driven by export and consumption expenditure; the first quarter data revised to raised 0.5%. German July trade surplus rose to a record high €25 billion which benefited from EUR devaluation. Overall, U.S. and European economy was still on track to reviving and the situation had not changed. General orientation of U.S. continuously improving labor market had no changes and, inflation level will be another crucial reason on Fed raising interest rate timing.
On domestic side, with regard to prior foreign reserve sharply decreasing, the People's Bank of China indicated that there were three factors: first was the central bank foreign exchange market operation, provided foreign exchange liquidity to market; second was August foreign exchange reserve entrusted loans project proceed a certain capital withdrawal; third was main financial asset price from international market retraced in varying degrees. We regarded the first one was the crucial reason and, from data perspective, China continuous decreasing holdings of US debt also reflected the demand to supply liquidity for foreign exchange market.

Stock Index
Yesterday Shenwan first grade industries all soared; computer, leisure service, medical and biotechnological, chemistry, mechanical equipment, electron, media and automobile all in 5% increase range; most concept sectors soared. Bank sector raised 1.8%, China Citic bank raised 7%. Under the optimism sentiment, discount market from stock index futures roughly regressed. Current price was overall low; the low point concept value from prior over speculation and later abandoned from market might gradually appear. But the bottom was long, the factors was hard to persist effecting. After stock index discount regression, it was highly likely upward momentum weakened. We recommend treat in fluctuation mindset.
Tuesday domestic and overseas copper price opened up high and went higher; holding and trading was in good coordination. Except for consumer support from Glencore Xstrata large amount of output reduction, anticipation on China continue issuing stimulating policy also made positive effect. Coordination from Macro policy and supply side always made firm basis on copper price rally trend since 2011 and, no exception for this time, Tuesday LME spots premium rose to $20, inventories decreased 6125 tons. Technically, copper price was in strong performance, LME was possible raising to $5800 in later market, bolster point was $5250; in domestic copper price might raise to RMB 52000/800 in November, bolster point was RMB 40000.
Soybean No.1 contract and soybean meal futures trading volume plainly decreased, observing momentum in market further enhanced. Domestic soybean spots were weak in stabilization, quotation in Heilongjiang province was among RMB 4200-4300/ton; new beans came in to market in North and, price fallen dragged entire market weaken pattern; marker purchase and sale was in serious division, shipment was slow; along with new grain supply increasing, spots market was estimated to maintain weak pattern before 1 October.
Soybean spots price edged up RMB 10-20/ton in partial regions, distributors was mainly in RMB 2620-2670/ton; August soybean import volume decreased 18% to 778,000 tons on monthly basis, total imports from January to August were 52.39 million tons, increased 9.8% on yearly basis. Under the impact of high yields of US soybean, market was in excessive supply momentum in short term; under the hammer of shorten circumstance, market was estimated continue weak out of volatile in short term. We recommend treat as fluctuation mindset as for operation.
Yesterday PP futures continued downward. In upstream, FOB Korea propylene decreased $5, average price was $690.5/ton. On spots side, yesterday domestic PP market edged down. PP futures opened up low and went lower, heavily struck market sentiment. Partial petrifaction enterprises reduced EXW and weakened market cost bolster. Most merchants shipped positively and sold in partial profits surrendered. Plants in downstream observing in cautious, demand of initiative receiving was low, trading and investing momentum in market was thin.
Intraday main quoted prices for wires of north, east and south markets are RMB 7950-8050/ton, RMB 8100-8300/ton and RMB 8000-8250/ton, respectively.
As for operation side, current moving average system was twined; MACD red column shorten, rally trend was frustrated as downward trend. It was likely to continue weak tendency recently.
                                                               Dong LV (Investment Certificate NO. TZ008452)