Daily Report 220116 2016-01-26
Macro Economy
Among the overnight market, China and US stock market rallied, energy sector together with oil price increased and, Europe central bank president Draghi indicated confronted the uncertainty from global economy growth, there might be more stimulatory measures. S&P 500 index rallied 9.66 point or 0.52% from 21 months’ low to 1868.99 point. US last week initial jobless claim increased 10,000 to 293,000 at a six-month high, indicated the employment was still in an excellent level. US Treasury Secretary Jacob Lew indicated in the Davos that, global economy was facing numerous resists; China was facing a long term difficult transition; Standard & Poor predicted global economy growth in 2016 at 3.6%. And Chinese real economy growth rate will continue the downward trend with this year prediction at 6.3%, shows US government officials still has certain concerns on global economy.
On Europe side, ECB indicated on Thursday would keep main refinancing rate at 0.05%, deposit interest rate at -0.3%, marginal lending rate at 0.3%. Speech from Draghi, the downturn risk increased again in this year and, Euro Zone inflation momentum was as well weaker than expected, it was necessary to evaluate and reconsider the monetary policy standpoint of ECB at the next meeting in March. He regarded the long term collapsed oil price might drag other commodities and service price downward trend which concerned market and, the risk of emerging market outlook was increasing. Draghi had showed similar indication on last October and, announced to reduce interest and extend the QE at the following December ECB meeting. The declaration of this speech showed a high possibility on releasing more stimulatory measure at the March meeting. Euro against US dollar exchange rate instantly dropped over 1% after this speech and then gradually rallied. International oil price rallied, Brent crude oil soared near 7% the whole day. ECB further easing is imminently and, Euro shows further downward momentum in the future.
 
 
Copper
Thursday copper price rallied under the short covering. LME spots rallied $6 to $2.5, inventory turn to increase 2825 tons. Shanghai copper spots discount narrowed RMB 10 to discount RMB 210-140, market trading was stabilized; market retail orders supply gradually increased, downstream entered the market as demand and traded in low point. ICSG indicated October global refined copper was surplus 2000 tons in 2015, accumulated surplus 60,000 tons in the first ten months; the global accumulated supply shortage was 485,000 tons in the first ten months of 2014. Global apparent consumption decreased about 1%, except for Chinese data decreased 3.5% year-on-year, Chinese apparent consumption increased 1.5% year-on-year. Global mine average capacity utilization was 84% in the first ten months, decreased from 85% in 2014. Copper price downturn made high cost mines out of production. Technically, LME resistance is at prior bolster line $4443, if the price rises above the resistance, then copper price revive scope can be opened. Domestic resistance is RMB 35500.
 
 
Soybean
Domestic soybean market was weak out of stabilization; recently soybean market imbalance between supply and demand in the northeast area sharply increased, though each grain dealer and enterprise kept purchasing, the buying momentum plainly waned and, buying volume was even continued depressing. We regard soybean No.1605 contract is hard to has unilaterally tendency before and after the Spring Festival.
Domestic soybean meal spots price edged down in partial areas, current domestic market terminal continued concentrated stocking up; trading in boost which bolster the price; oil plants quotation at port mainly at RMB 2600-2650/ton. But since the South America soybean is about to enter the market, price will under hammer after the holiday, be wary of the short term bullish scope. Oil against meal ratio broke through the lower edge of recent interval; short term tendency was in downward. As for operation, we recommend arbitrage between oil and meal temporally staying in observing.
 

PP
Yesterday PP futures continued fluctuated, opened at 5894 and ended at 5917; trading volume increased 488,000 lots to 1.941 million lots; holding increased 35654 lots to 654,000 lots. On spots side, yesterday domestic PP market tendency was overall stabilized, partial areas price slightly high quoted RMB 50/ton. Futures opened high and went higher continued boosting the practitioners’ sentiment; merchants lacked of demand to ship in low price and, under the bolster from market good of supply was relatively tightened, the marker price had limited scope for price concession. Plant in downstream was lacked of buying demand, terminal trading was insufficient, trading and investing momentum was thinner.
Current main quoted prices for wires of north, east and south markets are RMB 6120-6150/ton, RMB 6200-6350/ton and RMB 6400-6500/ton, respectively.
As for operation, current moving average system turned to upward, MACD exposure upward extended as stabilizing tendency. Bolster at 8100-8200 was plainly.
 
 
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