Daily Report 270116 2016-01-27
Macro Economy
US stock market Dow Jones Index set the largest increase over seven weeks; performance of 3M, Coach and other enterprises was better than expected and, energy sector together with oil price rallied after bear selling on Monday. S&P 500 index increased 26.55 point or 1.41% to 1903.63 point. On US side, November the S&P/Case – Shiller twenty cities housing price rose 5.8% year-on-year, exceeded the largest increase from July 2014. Conference Board released US January consumer confidence index rose from 96.3 in last December to 98.1 which set a three month high point. Markit released US January service industry operating activities index initial value at 53.7. Overall, the real estate data continued upward trend, operation in upstream, sale in downstream and price was all in the boost tendency which drive the US economy to revive. But in other aspects, as the bottleneck that manufacturing industries were facing, made economy overall revive was unsatisfactory. It is predicted tendency will mainly in slowly reviving in the future.
For domestic side, Economic Information Daily quoted source reported, Chinese authorities were studying and formulating guidance document and subsidy policy, to stimulate institutional investors buying the Inventory commodity house for lease. If the source is true, this policy will accelerate the selling speed of real estate market, especially in the first-tier cities. In addition, FOMC will end at intraday night; meeting statement will be released at 3 o’clock tomorrow morning and, expects to appear dovish view. The gold market has already reacted, this week accumulative rises about 2%. Above meeting needed to be focused.
Tuesday copper market trading and investing was thick, copper price performance was strong. From leading factors, since OPEC intend to hold a meeting to discuss decreasing the output reduction countries, crude oil price soared again and bolster the copper market. But the key of crude oil output reduction falls on Saudi Arabia and, the non OPEC member Russia; it is too early to talk about crude oil output reduction. Recent copper price sharply volatile along with the crude oil price, performance as rise more and fall less, shows bolster at copper market is larger; this as well relate to the copper price has sufficiently drops previously. Tuesday Chinese refined copper import volume soared 34.4% which was under expectation but, from another side, China can digest this amount of import volume which showed the impact from China to global market. Our focus this year is still on Chinese copper producers reduce output, reluctant to sell out and the national reserve purchasing; presumably these will impact the global market.
On fundamental side, LME spots premium increases $4.75 to $6.75, inventory turns to decrease 1450 tons. Shanghai copper spots discount narrows RMB 30 to discount RMB 180-100; stocking up before Spring Festival begins. Technically, copper price performance is strong and, is likely to soar in short term.
DCE soybean bilaterally fluctuated in the night session; oil against meal ratio was 2.302:1. Current south and north soybean and, selling market price all in downward trend, along with the Spring Festival is approaching, market buying and selling trend tends to thin, supply and demand side is unable to provide more supports; for overseas market, US soybean was in the dilemma of up and down, hard to has bullish momentum to boost the price in short term. We regard soybean No.1605 contract will mainly in weakly fluctuation tendency before and after the Spring Festival.
Domestic soybean meal spots price was stabilizing, terminal concentrated stock up was coming to an end, spots price stabilizing, demand on price supporting had slightly loosen. Trading and investing was in cautious at current stage, partial assets left the market; quotation of oil plants at port was mostly among RMB 2600-2650/ton. Oil against meal ratio was still in anxiety situation, as for operation, we recommend holding light arbitrage between long oil and short meal or staying in observing.
Yesterday PP futures opened low and went higher, opened at 5962 and ended at 6066; trading volume increased 234,000 lots to 1.437 million lots; holding increased 41142 lots to 705,000 lots. On spots side, yesterday domestic PP market price partially high quoted RMB 50-100/ton. Producer price of Sinopec east china, mid china, Petro China southwest, east china, and northwest increased at RMB 50-100/ton; partial areas market quotation rose followed the trend. But plants in downstream receiving momentum was flat, high price trading was resisted.
Current main quoted prices for wires of north, east and south markets are RMB 6250-6300/ton, RMB 6300-6400/ton and RMB 6350-6600/ton, respectively.
As for operation, current moving average system turned to upward, MACD red column extended and, intraday price strongly broke through 6000 integer bit as stabilizing pattern. If recent price was stabilized at 6000, may try to long at low price in light holdings; bolster at sixty days moving average was strong.
                                                             Dong LV (Investment Certificate NO. TZ008452)