Daily Report 140616 2016-06-14
Stock Index
Yesterday stock index opened low and couldn’t recovery, and sharply dropped after noon. Subject shares complete fail. Dow Jones index dropped 132 points. Recently, the expectation for a wave of recovery is wishful thinking. First, RMB continued drop during festival. Exchange rate risk still exists. Although the possibility of Fed interest hike is low, but can’t resist the mood of RMB short tendency. This is mostly from pessimistic expectation of the real economy and capital price foam. Secondly, according to authority article and Xi’s speech about technical development, government changes from demand government to supply reform and innovation. It has a positive influence in the long term, but a success reform is limited by many actual factors. Authorities got rid of economy’s V and U shape tendency, and it won’t be optimistic. Secondly, strict governance increased the difficulty of cash at high point rely on stories, which increases the willingness of reduce share holding.

Monday copper price rallied, and bolstered in moving average density area. The Fed will convene interest policy conference on Tuesday and Wednesday. From the market expectation shown by the Fed fund interest futures, market holds the opinion that the Fed won’t raise interest this month. The possibility of June declined to only 15.7%, and the opinion about unemployment rate in the statement after the meeting is focused by the market. The dollar index slightly adjusted, which provided rebound power to copper price, but the British retreat Europe support rate rise put pressure on the market. Back to the copper market, LME cash discount decreased $ 2.50 to $ 16.50, inventory continued to decline from 3050 to 208,000 tons. Recent LME stocks surge 60,000 tons after the start of a slight decline, but the spot remains weak. Recent Chinese copper import window opens, and increased Chinese demand for imports is a potential bullish factor. But given the current domestic copper consumption is still weak, we are still cautious. From a technical point of view, LME copper prices hovering around $ 4600, and we wait for the market to be significant. The transaction should set a fixed stop according to this price.

Domestically, DCE mixed with up and down, experienced yesterday soybean meal rose, the tendency is released. Spot, the domestic soybean spot traded flat, the quality of surplus grain declined overall. High quality soybean supply is short, around the spot buying and selling progressively end; because soybeans State Reserve auction is still has no definite news, the market observe cautiously. Soybean meal, follow the overseas section, domestic soybean spot price increased sharply. Partial district oil plant quotation increased RMB 70-160/ton. Now domestic pork output has entered into a new expand stage, as a result of higher port price, the expand speed and scale will exceed historical level. Strong overseas section and increasing forage demand make soybean even strong. But US soybean has roll back stress at $12, so domestic soybean should avoid the risk of roll back. As for operation, we recommend middle term long position reduce and focus on area report at the end of month.

Nature Rubber
Yesterday most domestic industrial products increased; Shanghai rubber price rose with fluctuation. US spot goods market quotation mixed with up and down as a result of overseas section dropped: domestic spots price is 1220-1230(+10); domestic cargo price is 1220-1240(-10); US RSS spots price is 1420-1450(-20); US RSS cargo price is 1470-1500(-30); Singapore cargo price is 1250-1270(-20); mixed rubber price is 9700-9800 (+100). From news side, China May above designated size industrial added value increased 6% year-on-year, expected to be 5.9% and former index was 6%. The former 5 months increased 5.9% year-on-year, expected to be 5.8%. Overall, rubber fundamentals are in line with the seasonal pattern of previous years. Upstream mail production country entered supply season continuously, macro surface expectation may change as a result of data concentrated release. The price is expected to shock at the bottom; we recommend mainly short-term trading.

Yesterday PP futures opened low and went high, opened at 6780, closed at 6930. Trading volume decreased 49036 to 0.439 million lots, and holding increased 7244 to 578000 lots. Spot, the domestic PP market yesterday was stable with small move, some slightly higher reported $ 30-50 / ton. South China Sinopec, CNPC Southwest and other parts of ex-factory price increase, the bolster to cost increased. Downstream businesses tempted to observe the reaction with a slight rise. Downstream plant purchase as demand, lack of follow-up deal making unsustainable gains, trading subdued atmosphere. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6900-7050/ton, RMB7050-7150/ton and RMB7000-7100/ton, respectively. As for operation, current moving average system changes; MACD red column lengthen; price ended above average 60, which is recover tendency.
                                                                            Dong LV (Investment Certificate NO. TZ008452)