Daily Report 230216 2016-02-23
Macro Economy
US stock market continued rallying, increased oil price relieved the investors’ concern on global economy slow down; S&P 500 index ended increased 27.72 point or 1.45% to 1945.50 point at a six-week-high. Data showed Markit released US February manufacturing industry PMI initial value was 51; Euro Zone February manufacturing industry PMI initial value was 51, market expectation was 52.4 and 52, respectively. San Francisco Fed president Williams indicated the US economy growth in 2016 was expected to near 2.25%, a gradually rate hiking path was still appropriate and, his attitude kept neutral and slightly tend to hawkish. From Europe side, overnight pound to US dollar set the largest down range since the British banking crisis in 2009 and, dropped to the seven years low, since the concerns from the voice of quitting EU; Johansson, the Mayor of London indicated he would drive UK quit the EU at the referendum in June; the dependent events might continued effecting. In addition, on the crude oil market, OPEC secretary-general El-Badri indicated OPEC and non OPEC oil producing country worked together would figure out a solution on low oil price, the oil production freeze would last for three-four months. If there is a further measure on output reduction and, causes a continuously rise on energy price, it will has an important impact to global economy, especially possibility on US revived inflation drives the Fed tightening policy will increase.

Stock Index
Yesterday stock market rallied; Shenwan first class grade all line raised; steel, coal sector rose in a leadership; launched de-capacity and stabilizing growth project had driven the market momentum. From the concept shares, cold-chain logistics, rare earth permanent magnet, Beijing-Tianjin-Hebei Region integration, Yangtze River Economic Zone was in active performance. The revive trend after the Spring Festival was on three reasons: firstly, declaration from top managements: prime minister indicated would decisively take actions if the economy dropped out of a reasonable interval; the eight ministries and commissions issued that economy should bolster the real economy. Secondly, exchange rate was basically stabilized, market sentiment was steady temporally; Zhou Xiaochuan indicated on the exchange rate and would against with speculation momentum. Thirdly, the numerous amounts of credits especially were further increasing in February; speed on bank release accelerated; continued implementing proactive fiscal policy which was stabilizing growth. Meanwhile continue pushing forward supply side reform; the state-owned enterprises continued deepened push forward. In consideration of index is not high and, has dropped for a long time; short term sentiment is strong; there is bolster at low point, the focus of fluctuation maybe continue increasing.
Monday overseas copper price continued rally trend and, ended increased 1.69%. Along with constantly introduced real estate stimulated policy in domestic, market pessimism expectation on Chinese economy was relieving; recent domestic stock market performance was strong. After the domestic stock market ended low, yesterday Europe and US stock market as well all raised, market risk appetite increased. In addition with crude oil price soared over 4% yesterday, copper price ended high under the upward trend. On copper side, LME spots premium increased $0.25 to premium $3.5, inventory continued decreasing 3025 tons. Domestic spots discount narrowed RMB 5 at discount RMB 220 – RMB 130; the merchants and middlemen continued buying and exchanging goods but, still lost out to the market sufficient supply; downstream enterprises still entered the market in scant amount; market trading and investing was thin; mainstream trading was still in between the merchants. China January refined copper import increased 7.8% to 324,000 tons year-on-year, it was the refined copper import achieved positive growth for the eighth straight month.
Technically, copper market was still in the first quarter rally trend, short term copper price was near to the resistance line of the interval and, we waited for clarifying. LME was $4720/30; domestic was RMB 36900/37000.  
Yesterday PP futures fluctuated in high point; opened at 6414 and ended at 6380; trading volume decreased 264,000 lots to 1.594 million lots; holding decreased 10430 lots to 615,000 lots. On spots side, yesterday domestic PP market showed slightly rose increase trend. Petrifaction producer price was stabilizing which formed a certain bolster to market cost. PP futures operated in high and strongly boosted the market sentiment. Merchants shipped followed the tendency, partial merchants slightly high quoted. Plants in downstream hadn’t back to operation yet, market trading was mainly on merchants receive.
Current main quoted prices for wires of north, east and south markets are RMB 6200-6450/ton, RMB 6300-6500/ton and RMB 6500-6700/ton, respectively.
As for operation, current moving average system still formed in long.

                                                                        Dong LV (Investment Certificate NO. TZ008452)