Daily Report 110316 2016-03-11
Macro Economy
US stock market benchmark index leveled off and, was mixed with ups and downs during the market; investors estimated the new stimulate policy from ECB. S&P 500 index slightly increased 0.31% or 0.02% to 1989.57 point. Europe stock market dropped after soaring. From data side, US last week initial jobless decreased 18,000 to 259,000, plainly lower than the 275,000 mid-value estimated from economists and, was far away from the annual average level 278,000 in 2015 which indicated the US employment was still under stabilizing reviving track. According to Bloomberg’s survey, Fed is expected to keep the interest rate in next week and, 55% of interviewees expect Fed will reiterate the wording in January statement, which is assessing the global economy and financial developments and, this will be considered probability on Fed hike interest rate in April has lowered. Fed funds rate futures shows probability of interest rate hike in March and April is only 0% and 20%; next focus will be the Fed March meeting statement.
From domestic side, PBOC president Zhou Xiaochuan and, CSRC, CBRC, CIRC chairman will hold press conference at Saturday; January to February industry, retail sales and fixed asset investment data will be released tomorrow as well. According to the estimated mid-value from Bloomberg’s survey, total volume of retail sales year-on-year growth might increase to 10.9%. Industrial added value and fixed asset investment year-on-year growth expects to decrease to 5.6% and 9.5%. In addition, from intraday to 15 March is the window period of PBOC release February credit data. Market expectation shows new yuan loans and social financing scale increments expects to fell by half compare to January, to RMB 1.2 trillion and RMB 1.84 trillion respectively; M2 growth expects to slightly decrease to 13.7%, please pay attention on it.
Thursday domestic and overseas copper market trading and investing was thin and, copper price narrowly fluctuated. On copper market side, LME spots premium increased $1.5 to premium $11.5, inventory continued decreasing 3400 tons. Domestic spots yesterday discount continued at RMB 110-60, downstream continued purchasing but, the buying momentum plainly decreased compare to prior trading volume. Recent copper price hardly revives which is mainly because of output reduction at supply side and the expectation from reserve receiving; but along with the increasing copper price, bolster from this factor is weakening. Technically, copper price hasn’t shown sign on revive trend closure, pay attention on copper price breakthrough direction of the interval. LME is $4850-4950; domestic is RMB 36800-37500.
DCE soybean is in divided tendency; soybean No.1 contract ended low and, oil against meal ratio set record high. Northeast soybean price is stabilizing in most areas, market trading is thin; especially at the Heilongjiang area, current market mainstream purchase quotation is RMB 3600-3700/ton; market high quality and high price pattern is plainly. Partial Heilongjiang grain place suspends to purchase commercial soybean for consuming inventory; since recent export sales is poor, grain merchant’s purchase and shipping all face hammer.
From soybean meal side, domestic oil plants operation ratio is high, import soybean supply is sufficient and, pig and other breeding stock is low, which is unable to drive the demand from breeding enterprises, most soybean meal consumption speed is still slow. Along with forward import soybean and soybean meal producer cost is decreasing, domestic soybean meal market still has scope for downward. As for operation, we recommend cautiously entering the soybean sector; arbitrage between long meal and short oil stop loss above 2.48:1.
Natural Rubber
Yesterday Shanghai rubber continued dropping under decreased positions, US dollar spots market price dropped for the third straight day: domestic spots price 1210-1230 (-40); domestic cargo price 1240-1250 (-40); US dollar RSS spots price 1400-1440 (-20); US dollar RSS cargo price 1420-1450 (-20); RMB mixed glue price 9700-9800 (-300). From news side, yesterday released Chinese February CPI increased 2.3% year-on-year which set record high over 19 months; intraday statistical bureau would continue releasing M2 and social financing data. In addition, leader from one bank and three commissions will be held on Saturday. ECB decreased interest rate and expanded QE scale and scope but, Draghi indicated there was no need for further rate decreasing at the followed press conference; Euro and gold performance reversed. Overall, market was sharply volatile, short term trading might in observation under numerous risk events.
Yesterday PP futures opened high and went high; opened at 7211 and ended at 7082; trading volume increased 81606 lots to 2.265 million lots; holding decreased 10154 lots to 436,000 lots. From spots side, yesterday domestic PP market price most rallied, futures opened high and went high and, petrochemical east china, mid china coordinated to rally which boosted practitioners’ mindset, merchants quotation went high. But plants in downstream receiving momentum were weaker than at the beginning of last week, trading was flat.
Intraday main quoted prices for wires of north, east and south markets are RMB 6900-7000/ton, RMB 7100-7250/ton and RMB 7100-7200/ton, respectively.
As for operation, current moving average system still arranges in long but, MACD red column shortens, upward momentum weakens.
                                                   Dong LV (Investment Certificate NO. TZ008452)