Daily Report 130516 2016-05-13
Macro Economy
Domestically, the National Bureau of Statistics will release the data concerning industry and retailing of April on Saturday. The market expects that the industrial production rises 6.5% YoY, compared to 6.8 in March. Total retail sales of consumer goods rise 10.6% YoY, compared to 10.5% in March. Besides, the RMB loans in April that are expected to be released from today to weekend drop 40% MoM, amounting to 800 billion RMB.

Thursday copper market investment and trading was active, and new short position entering market lowered the price. From macro perspective, Thursday US employment applying is more than market expectation. Nevertheless, the officials in the Federal Reserve have expressed the willing to increase the interest rate to some extent during their recent speeches. Meanwhile, Japan implies further loosening of monetary policy. The exchange rate of USD have been supported, and increasing market participants expect the USD to appreciate, which paves the way for the downtrend of copper price. China consumes the most copper over the world. The macro data expected on Saturday would prove the downtrend of copper price after the termination of recent uptrend. Considering that the Authority of China stresses the structural reforms, the copper price has more forces to go down. Back to copper market, Thursday LME spot goods discount increased $5 to $14.25, and storage decreased 1625 tons. China copper market is near the last trading date; spot goods premium is RMB 20-70. Consumers are mainly observation, and the consumption off-season might be the biggest pressure for copper price. In addition, the report on April copper output increase also adds stress on the market. Technically, copper price continues going down, which opens the downward space. The target point is near the lowest point of this year.

Domestically, DCE night section all lines dip; soybean oil closed limit. Oil against meal ratio decreased to 2.17:1. From spot goods side, north China soybean price is stable, and some areas increases RMB20-40/ton. High quality soybean price is on the progress of continuous increasing. The rumor of soybean storage auction affects the purchasing power of sales market. Market’s focus turns to old grains. From soybean meal side, spot goods market continues increase tendency, and the range is around 20-30. The market’s enthusiasm of chasing high is rising, and dealing volume is high. From mid and long term, as a result of overseas section strong tendency, and domestic cultivation recovery situation is good. DCE soybean will continue fluctuation upward situation following US market. Hold long position after call back, and be cautious about short position. As for operation, soybean long position can be held, and arbitrage between oil and meal observe temporarily.

Nature Rubber
Yesterday Shanghai rubber night section decreed; US spots market dropped following overseas section. Up to spots trading period: domestic spots price is 1410-1420(+10); domestic cargo price is1400-1410(0); US RSS spots price is 1600-1610(0); US RSS cargo price is 1620-1640(0); mixed rubber price is 11000-11100(0). From news side, yesterday, in the letter the president of the Fed wrote to congressman claims that economy will continue to be strong, and inflation will recovery to target point gradually. She claims that if economy forecast changes, the Fed will change monetary policy. What’s more, the possibility of negative interest rate still exits. The Fed has to consider the bad effect that the negative interest rate will bring. Overall, after we indicated market weaken at the beginning of this month, domestic industry and Shanghai rubber are in a rush. Yesterday night section the price went down below average 60, and is expected to keep weak.

Yesterday PP futures opened high with fluctuation, opened at 6784 and ended at 6820; trading volume decreased 91492 lots to 517,000 lots; holding decreased 16066 lots to 496,000 lots. From spots side, yesterday domestic PP market tended to upward out of stabilization, price rallied RMB 50-100/ton. Petro China north china, east china, south china and other areas increased the producer price which enhanced bolster to supply costs; merchant shipped following the upward trend. Futures opened high and soared which further boosting practitioners’ confidence, along with merchant inventory was at low level, upward tendency is under bolster. Firm offer from downstream plants still purchase on demand, partial plants stock up appropriately; trading from terminal end is limited, market trading and investing momentum improves.
Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6700-6800/ton, RMB 6800-6850/ton and RMB 6800-6950/ton, respectively.
As for operation, current moving average system twisted and, MACD green column shortened, price is plainly under the bolster from 60 day moving average.
                                                                                       Dong LV (Investment Certificate NO. TZ008452)