Daily Report 150616 2016-06-15
Stock Index
Yesterday stock index fluctuated slightly, rushed high and rolled back. MSCI announced delay the joint of China A stock. Off shore RMB decline range increased, which is more than 100 points. Cause the good expectation empty. Now the recovery difficulty is increasing. First, reducing holding is increasing, and industry capital isn’t optimistic about the afternoon market. Strict governance increased the difficulty of cash at high point rely on stories, which increases the willingness of reduce share holding. Second, exchange rate risk still exists. Although the possibility of Fed interest hike is low, and this is mostly from pessimistic expectation of the real economy and capital price foam. Thirdly, from the core reform side, 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. Technically, the recovery has no results, on the contrast is largely drop, which is the failure of long; the future is short and fluctuation.

Tuesday copper price is weak, and still hampered by the 10-day moving average. The Fed will announce its interest rate decision, although the market is generally considered hopeless hike in June, but still should concern about what implied by its relevant policy statement. In addition, the British retreat Europe referendum on June 23 is currently the biggest market risk. Because the retreat Europe support rate rise, the market hedging demand surge, the strengthen dollar put pressure on commodity markets; currently the VIX index which reflect panic has rapidly increased to 20.5 in the near future. Back to the copper market, LME discount narrowed $ 1.75 to $ 14.75, inventory continued to decline 4350 to 203,000 tons. The supply side, Chile's copper output in April representing a decrease of 8.1% year-on-year to 431,000 tons due to heavy rains in central copper minerals. Peru's copper production in April increase 53.5% year-on-year due to copper mine expansion and new operation of the project. From the point of view of both total output, total production in April this year is 619,000 tons, increased 4.21% year-on-year. Peru made up the yield caused by Chile heavy rains. Judging from processing fees, Bloomberg given is $ 100 / ton, or 10 cents / lb, Shanghai Metals also given to US $ 95-100 / ton, improved compared with the previous, reflecting the global copper supply amplification. From a technical point of view, copper is still blocked at key resistance level, LME 4600, China is 35,500 yuan, if the above resistance is effective, copper price is still possible to go downside to early lows; it is still bearish on the trading operation.

Domestically, DCE Soybean night section had a slight pullback; the market followed the US section trend. Oil against meal ratio rebounded. Spot, the recent Northeast soybean is stable on the strong side, and the pace is slowing down, the price experienced a rose in May then went into an adjustment phase. Because of supply and demand have shown signs of fatigue, the market continued stalemate, under the dual pressures of acquisitions and shipping in some areas, grain merchants stopped harvest and observed. Currently, overall producing surplus stock decline has been very serious problem, since the State Reserve soybean auction is still no definite news, the market observe cautiously. Soybean meal, influenced by overseas section roll back, the domestic soybean meal spot price decreased 30-60 yuan / ton. Recent influenced by the impact of rising oil plant, downstream procurement accelerate the pace, but breeding demand has not increased significantly, soybean stocks changed to the downstream side in the hands of traders and fodder enterprises. Short-term adjustment of the overseas section influenced the material further downstream procurement rhythm, sustained attention to the US soybean callback and area report at the end of month. As for operation, we recommend reduce middle term long position.

Yesterday PP futures opened high and dropped, opened at 6932, closed at 6840. Trading volume increased 1370 to 0.44 million lots, and holding decreased 9574 to 568000 lots. Spot, the domestic PP market was stable and slightly increased. Part of the petrochemical factory price hike and the support on cost of the market has been enhanced. PP futures rolled back from high point, and cause some strike on the market mentality. Traders accompanying shipments; some businesses exploratory overstated, observe the market reaction. Downstream plant willingness to accept the goods is limited, the market trading is subdued. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6900-7050/ton, RMB7050-7200/ton and RMB7050-7200/ton, respectively. As for operation, current moving average system changes; MACD spread upward, which is recovery tendency.
                                                                             Dong LV (Investment Certificate NO. TZ008452)