Daily Report 241215 2015-12-24
Macro Economy
US stock market: S&P 500 index for the third straight day ended high and, gained back the whole year lost profit; energy stock had its largest growth in three months. S&P 500 index rose 25.32 point or 1.24% to 2064.29 point. US Wednesday released economy data revealed November excluded aircraft non-defense capital goods orders decreased 0.4% for the first decrease since three months; in October it rose 0.6%, the half value of initial value. November overall durable goods orders leveled off with last month. November personal outlays increased 0.3% month-on-month; personal income as well increased 0.3%, set the largest growth in three months. Newly built house sales increased 4.3% to annual rate of 490,000, lower than expected 505,000. University of Michigan Consumer Sentiment Index rose to five months high level in December and exceeded expectation. In addition, under the bolster from an eighth straight month increased income, US November PCE price index steadily increased 0.4% year-on-year; last week released data already showed US November core CPI increased 2% year-on-year and, basically reached the Fed’s target. Inflation plainly increased as expected by the end of the year which would bolster Fed’s tighten policy in the future, but from the performance of capital goods, path on Fed’s interest rate hike would not be fast. We regard since oil price had sharply rallied in the second quarter of this year, cardinal utility would bring the situation on weakened inflation in the second quarter of next year and, was against the determination on Fed’s interest rate hike; hence, we continued holding the estimation on at least one interest rate hike in the first half year. After this PCE data released, downward scope on US debt extended, ten-year bond yields rose to 2.264%.
On domestic side, China’s Prime Minister Li Keqiang presided a State Council executive meeting on 23 December, determined to lower the on-grid price by coal-fired power generation; determined to further facilitating direct financing and, to create a strategic emerging industries board on the Shanghai Stock Exchange; determined to promote integrative development of the first, second and third rural industry. In addition, China’s central bank released, from 4 January trading time on interbank foreign exchange market will be extended to 23:30 Beijing time and, still take rate at 16:30 as the closing price, for avoid distortion and manipulation. The RMB opened night session is a bullish to narrows the difference between offshore and onshore but, it basically cannot relieve the hammer on RMB devaluation; it even implicated the RMB would release pressure before the next US dollar interest rate hike.
Wednesday overseas copper price rallied after domestic market closed and, ended edged up. Mainly because of shorten positions were taking profits. LME spots discount narrowed $7 to discount $4.5, inventory continued increase 1325 tons. Shanghai copper spots were discount RMB 120 to RMB 40, overall trading slumped after rally. On industry side, according to news from central bank of San Diego, Chile November copper export value was $ 2.729 billion, decreased 9.1% year-on-year. Technically, copper price will fluctuate recently; if LME effectively rises over $4750, next target is $4900; domestic copper resistance level is RMB 36350, RMB 38000. From 24-28 December is the Christmas holiday in the United Kingdom, LME market will be closed.
DCE soybean was overall in fluctuation in the night session; grease was in strong tendency, oil against meal ratio tended to strong. Recent domestic soybean rallied in north and dropped in south, though northeast soybean slightly increased; fundamental on supply and demand was still weak; buying momentum in grain depot and protein plant slightly increased. We regarded fluctuation interval on soybean No.1605 contract was RMB 3640-3800/ton, recommend buying in low and selling in high among this interval.
Domestic soybean meal spots price was stabilized, market’s observing sentiment was plainly; oil plant tended to support the price, buying momentum in downstream was flat. Current demand in selling areas hadn’t recovered; trading was only because of market price rallied and stimulated the traders’ sentiment. It was estimated domestic soybean meal spots price would operate in strong fluctuation in a short-term. Oil against meal ratio was 2.35:1, fluctuation interval in short cycle was among 2.3-2.45:1. As for operation, we recommend longing the oil against meal ratio among this interval.

Natural Rubber
Yesterday shanghai rubber continued volatile after rose to limitation, changes on US dollar spots price was not plainly: domestic spots price was 1120-1140 (0), domestic cargo price 1150-1170 (0), US dollar RSS spots price 1250-1260 (+10); US dollar RSS cargo price 1250-1270 (0). On news side: General Administration of Customs latest data revealed, China natural rubber import value was 264,942 tons in November 2015, increased 25% month-on-month and, increased 21% year-on-year. November synthetic rubber was 230,976 tons, increased 19% month-on-month and, soared 106% year-on-year. Overnight oil price, US stock market and US Treasury bond yield again increased; EIA inventory data released in morning session revealed, US crude oil inventory sharply decreased 5.877 million barrel in last week, complete different from market’s expectation of increased 1.4 million barrel. Overall: though the medium to long term bearish tendency was hard to shift which led by fundamental side, current macro and other factors narrowed shorten positions on futures side, we remained the revive opinion from 26 November.

Yesterday PP futures continued fluctuated, opened at 5782 and ended at 5766; trading volume increased 32972 lots to 1.544 million lots; holding increased 11432 lots to 587,000 lots. On spots side, yesterday domestic PP market price was in consolidation, partial price edged up RMB 50-100/ton under the bolster from supply costs but, difficult for trading and investing in high point. Most petrifaction producer price stayed in stabilized no big variation on main quoted prices. Futures opened high and went lower made market observing sentiment thicker, trading was in normal level and, slightly worse than in yesterday.
Current main quoted prices for wires of north, east and south markets are RMB 6100-6200/ton, RMB 6200-6500/ton and RMB 6350-6600/ton, respectively.
As for operation, current moving average system turned to upward, MACD red column up extended as revive trend. We recommend long positions holding in cautious.
                                                                    Dong LV (Investment Certificate NO. TZ008452)