Daily Report 090316 2016-03-09
Macro Economy
US stock market energy sector rose in the leadership, the worsened Asia economic data again caused investor’s concern on global economy growth. S&P 500 index slumped 22.5 point or 1.12% set the largest low over two weeks and, ended at 1979.26 point. From US side, journalist Jon Hilsenrath from the Wall Street Journal which is called as “Fed news agency” wrote, since the uncertainty from global market and economy, Fed might hold the fire at next week meeting and, might hike interest rate again at April or June FOMC meeting. Current among the ten Fed voting members, there is only one or two members are leaning to hawkish and others are neutral or dovish. Since recent global financial market risk mitigation and, the hammer from increased inflation which driven by oil price, partial officers’ attitude have changed. In addition, probability of rate hike in March, June, December is 0%、28.9%、41.8%, respectively; March Fed meeting statement might give a further guidance to market; we still keep our view on one rate hike in the first half year, meanwhile pay attention on the risk from the effects of hawkish. From Europe side, Euro Zone fourth quarter GDP growth modification value month-on-month is the same as last month released initial value at 0.3%, conform to expectation; year-on-year growth revises from 1.5% to 1.6% which is slightly better than expectation. German economy growth conforms to expectation, compared with Italy and French economy growth is disappointed. We regard possibility of ECB decrease interest rate in March is high, Euro and non US asset price will face volatile in a short term, relative risk need to be prevented.
SCE soybean dropped followed with peripheral market; oil against meal ratio repeatedly volatile in the high point. Currently, high-moisture surplus grain holds a large percentage in Heilongjiang area, along with the weather is getting warmer, difficulty on storage is getting larger. State reserve soybean might undersell at low point in this year, market tendency expectation is weak. Heilongjiang soybean price continues reducing in a short term; price in Inner Mongolia, Jilin and other area might stay strong.
From soybean meal side, yesterday domestic soybean meal spots price were mostly slightly decreased RMB 10-30/ton and, partial areas kept stabilizing. DCE soybean futures price slumped after soaring, market pessimistic mood continuing; forward import soybean port arrival amount was huge and cost was low; breeding industry slowly revived and demand was limited. Soybean meal fell again after short revive, predicted downward trend was limited and, medium and long term would mainly weakly operation. As for operation: we recommend soybean sector entered in cautious; arbitrage between long oil and short meal continue holding.
Tuesday overall market sentiment changed since recent all line soared turned to all line slumped; copper market cannot avoid this trend neither, with overseas and domestic copper slumped over 2%. From market report side, Tuesday China export data downturn extended to 25% was the crucial reason on market turned to collapse, we regard the global weakly global economy is a long standing macro background, short term need to pay attention on policy side variation. Back to copper market, LME spots premium increased $2.5 to $10.25, inventory continued decreasing 375 tons. Domestic spots were discount RMB 150-70 yesterday, after copper price dropped, partial downstream side bought in the low point and long positions slightly increased. Recent copper price rally trend is mainly because of supply side output reduction got bolster, along with price raised market hammer was increasing, we tended to recent copper price will sharply volatile and, we recommend seeking for a good opportunity to short.
Yesterday PP futures volatile at low; opened at 7074 and ended at 7056; trading volume decreased 297,000 lots to 2.054 million lots; holding decreased 43764 lots to 451,000 lots. On spots side, yesterday domestic PP market trend continued upward trend and price mostly increased RMB 100/ton. Producer cost of Sinopec mid east, south east, and Petro China south china continued increasing which enhanced bolster to supply of goods, merchants continued shipping followed upward trend. Since earlier futures opened low and dropped, practitioners’ mindset were in cautious, shipping enthusiasm plainly increased. Plants in downstream still appropriately purchase, real market observe sentiment increased, trading volume decreased.
Intraday main quoted prices for wires of north, east and south markets are RMB 6800-7000/ton, RMB 7000-7200/ton and RMB 7050-7250/ton, respectively.
As for operation, current moving average system arranged in long; MACD red column extended as bullish pattern; recent price predicted to continue strong out of fluctuation, prior long positions pay attention on risks.
                                                   Dong LV (Investment Certificate NO. TZ008452)