Daily Report 101115 2015-11-10
Macro Economy
Yesterday US stock market went low, S&P 500 index set one-month largest down range; the possibility of Fed increase interest rate in December might hammer the stock market. S&P 500 index slipped 20.62 point or 0.98% to 2078.58 point. Boston Fed president Eric Rosengren indicated, the US economy data was inspiring and, some investors started to take more risks had made Fed properly considering the initial interest rate hike in the next month and, would gradually increase interest rate afterwards. MNI reported, Chicago Fed president Charles Evans indicated, would not preset the position on against interest rate in December. The mid-value from New York Fed October consumer expectation survey reveal, from now on to the next three year, the consumer annual inflation expectation is 2.78%, lower the September survey 2.84% which is down to the record low level since June 2013. In addition, according to Saint Louis Fed latest model, the possibility of lost control on inflation in the next one year was zero. Overall, OECD indicated during the semi-annual report on Monday, global economy growth would be 2.9% in 2015; 3.3% in 2016, which was lower than September expected 3% and 3.6%. Current global economy all showed certain weaken trend except for US led to reviving.
On domestic side, Xinhua news agency reported, Chinese President Xi Jingping chaired the eighteenth meeting with the central comprehensively deepening reforms leading group on 9 November, which adopted the opinion on accelerate implement FTA strategy; emphasized insist on the market decisive role and government function in resource allocation; overall consideration and comprehensive application on domestic and overseas market; gradually construct the globally oriented high standard FTZ network. OECD estimated Chinese GDP growth in this year and next year would be 6.8% and 6.5%, respectively; nearly no changes compared with prior expectation. In addition, Chinese October CPI and PPI would be released on 9:30 intraday; CPI expected to increase 1.5%, prior was 1.6%; PPI expected to decrease 5.9%, prior was 5.9%; data should be focused.


Monday copper price was weak, copper price down over the bolster line of consolidation range from August. On fundamental side, LME spots premium slightly rally to $8.75, inventory decreased 4975 tons. Domestic spots were discount RMB 50 to premium RMB 10; demand was still weak. On supply side, First Quantum third quarter report revealed, its copper output increased 4.9% year-on-year to 107,000 tons; the copper output in last three quarters was decreased 4.5% year-on-year to 308,000 tons. Sentinel would reach commercial production level by the end of 2015; annual refined copper output from its mine was 270,000 to 300,000 tons. Expectation from Chile, copper market would be in short supply by the end of 2017.
Technically, copper price had down over the bolster line from August, the possibility of further dropping in the future market increased. Copper price resistance point was $5000, in domestic was RMB 38000. As for operation, we recommend holding shorten but, set the stop loss point.
Northeast soybean continue downturn, situation of market in nominal price was plainly; trade grain was still unsalable, continue weaken in short-term but, the price down range was predicted to be limited. North China spots price continue rally, protein plants increased purchase price; farm reluctant to sell out was still serious. Contract 1605 focus on the bolster at 3800, prior positions may consider to take profits at this point.
Partial of soybean meal spots edged down, market was still affected by the increased supply and sluggish demand, no changes on bearish sentiment; oil against meal ratio was 2.22:1, still in upward trend.
As for operation, soybean No.1 contract short holdings should stop profit and close positions; hold arbitrage between long oil and short meal.
Natural Rubber
Yesterday Shanghai rubber sideway fluctuated; US dollar spots remain weak: domestic spots price 1200-1220 (-10), domestic cargo price 1190-1220 (-20), US dollar RSS spots price 1220-1240 (0), US dollar RSS cargo price 1210-1230 (0), Singapore cargo price 1220-1230 (-10). On news perspective: China’s general administration of customs latest data revealed: China October natural rubber and synthetic rubber, including latex import volume was 410,000 tons; increased 36.7% year-on-year and, decreased 10.9% compared with 460,000 tons in September. The total rubber import value was 3.64 million tons from the start of 2015 to present, increased 8.6% year-on-year. On macro side: after Chinese announced IPO resumption, Shanghai stock index volume increased and rallied to 3600 point, ten-year Treasury bond futures set single day largest decrease level. Overall, market capital sentiment was stable, fundamental side on Shanghai rubber continue weak; spots enterprise selling at high point.
                                                                       Dong LV (Investment Certificate NO. TZ008452)