Daily Report 080616 2016-06-08
Stock Index
Yesterday stock index slightly fluctuated; securities section supported the market again. Most sub-new stock limited up. Yi Gang claimed RMB has prepared for US interest hike. Friday US May newly increased non-farm positions 38000, far away from 160000. Interest hike expectation declined, which is benefit to domestic capital stable. One red line of 31 May broke though several days short term moving average, previous sluggish was long, then rallied as a result of Shenzhen-Hong Kong Stock Connect program and Xi’s speech about technical development. Market attitude changed. Since the red line rally, 68 companies released the shares holding situation of chairman, president and senior executives. Only four companies increased holding, and 64 companies reduced holding. Industry capital isn’t optimistic about afternoon section. With index recovery, more holding reduction will appear. Because of strict supervision and reducing foam, high valuation cash game is not easy to play anymore. In particular, the Commission yesterday denied Baofeng Technology acquisition of Straw Bear Pictures case, which has landmark significance. From supply side, reform is the principal line which shows hope on a long term but, enterprises temporarily profit is hard to rise, which may hammer the investors’ long term confidence. If policy can give investor stable and positive expectation, then index is still hopeful; should be cautious and optimistic.
 

 
Copper
Copper prices fell sharply on Tuesday. Macro level, the weak US employment data cooled the market expectation of the Fed to raise interest rates. Tuesday, Yellen said further gradual rate hikes would be appropriate, but the market considered the first rate hike will be in September, the US dollar exchange rate fluctuated within a narrow range. Tuesday China's foreign exchange reserves fell to $ 27.9 billion by the end of 2011 to the lowest, which has a big relationship with expected interest hike. China represents a two-way exchange rate fluctuations, the future will remain stable. China’s influence on the global economy is growing; global policies balance each other so that the risk is reduced. Back to the copper market, the colored market mixed with up and down, the copper market performed weakest, which is related to a substantial continuously increase of LME inventories. LME storage increased for the second continuous day, spot goods turned to discount $4. Rare storage increase stress on market, which was mainly in Asia. In addition, Bloomberg data show that in May China Bonded stocks increased by 10 million tons to 62 million tons. May Chinese copper processing fees rose 5 percent to $ 100 / ton, the recent market pressures still exist. From a technical point of view, copper prices break below the recent trading range support level of $ 4580, so the resistance is effective, copper prices will continue dropping to low point of the beginning of the year. Domestic resistance is 35,200 yuan.
 

 
Soybean
Domestically, DCE night section rolled back. Oil still weak; oil against meal ratio fluctuated downward. Spot, north soybean spot market trade flat. Heilongjiang filtered goods purchase price is RMB3900-4000/ton. Overall, north supply gap is more and more obvious. Most area purchase is at the suspension situation, since the scale is small. Market is still care about when national storage will start auction. From soybean meal side, spot goods increased, with range of RMB 20-40/ton. Market trading turns good, and some oil plants increase volume. Costal oil plant quoted RMB3180-3220/ton. Now domestic fundamental is still strong, statistical agencies amounted to 8.5 million tons of soybean imports this month, oil refinery supply pressure will increase. But by the strong influence of the United States, domestic cost of import rises in the short term. Soybean meal remained strong. This weekend USDA supply and demand report will be released, before that the market is still under adjustment. . Since we hold the opinion of fluctuation and strong tendency for US section, and domestic breeding recovery situation is good, soybean meal is long in the middle term. As for operation: light long position before festival.
 

 
PP
Yesterday PP futures continued fluctuation, opened at 6798, closed at 6771. Trading volume decreased 201000 to 0.294 million lots, and holding increased 2124 to 580000 lots. Spot, the domestic PP market overall stabilization yesterday, and a few reported slightly higher of 50 yuan / ton. Petroleum Northeast, Petroleum South China part of ex-factory price hike, increase the supply cost of support, but futures decreasing intraday and downstream demand insufficient follow-up weighed on the market, traders sell with profit surrender. Holidays approaching, the industry market enthusiasm is not high, and trading atmosphere slowed. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6850-6950/ton, RMB7050-7100/ton and RMB6900-7050/ton, respectively. As for operation, current moving average system changes; MACD red column lengthen; price ended above average 60, which is recover tendency.
 

 
Nature Rubber
Yesterday Shanghai rubber dropped with decreased volume again. US spot market price decreased: domestic spots price is 1220-1230(-30); domestic cargo price is1230-1240(-20); US RSS spots price is 1460-1480(-10); US RSS cargo price is1520-1550(-30); Singapore cargo price is 1280-1310(-30); Thai cargo price 1310-1330(-20); mixed rubber price is 9700-9800(-100). From news side, World Bank maintains China's growth forecast unchanged at 6.7 percent, saying the sharp slowdown of China economy is a low-probability event. At the recent China-US Strategic and Economic Dialogue, the two sides reached a series of agreements, China will provide 250 billion yuan RQFII, and prepared to set up RMB clearing bank in the United States, but the two sides still have differences on overcapacity. Data show that China's foreign exchange reserves in May decreased $ 28 billion month-on-month, to $ 3.19 trillion, the lowest since the end of 2011. Statistics will be released of trade and economic data from today. Today will release May trade data, market expected export may face accelerated decline. Overall, rubber fundamentals are in line with the seasonal pattern of previous years. The price is expected to shock at the bottom; we recommend mainly short-term trading.
                                                                                 Dong LV (Investment Certificate NO. TZ008452)