SMM News: on the afternoon of July 22nd, the incident in which the US side asked the Chinese side to close the Consulate General in Houston attracted much attention. Subsequently, it was learned exclusively from authoritative sources that on July 20, US Eastern time, the Visa Office of the Chinese Embassy in the United States received a series of harassing calls from an unknown number. The caller was a male who spoke English. He dialed repeatedly and hung up after the staff answered. After the last call, the other party asked, "is this the Visa Office of the Chinese Embassy?" (Chinese Embassy Visa Office?) after receiving an affirmative answer, he said, "do you know what is in your hall?" (Do You Know What's in Your Lobby?) then the man imitated the sound of an explosion and hung up the phone.
On the same day, Foreign Ministry spokesman Wang Wenbin said at a regular press conference that "the US side asked the Chinese side to close the Consulate General in Houston." he said that for some time, the US Government has been blaming the Chinese side and carrying out stigmatization attacks on China, attacking China's social system for no reason, unreasonably creating difficulties for Chinese diplomatic and consular personnel in the United States, intimidating and cross-checking Chinese students studying in the United States, and confiscating personal electronic equipment. Or even detention for no reason. In October last year and June this year, they imposed restrictions on Chinese diplomats stationed in the United States for no reason, and secretly opened China's diplomatic pouch many times and seized Chinese official supplies. Due to the recent wanton stigmatization and incitement of hatred by the US side, the Chinese Embassy in the United States has recently received bombs and death threats against Chinese diplomatic agencies and personnel in the United States.
As of the early morning close, the US S & P 500 index was up 0.57%; the European Stoxx50 index was down 1.02%; the dollar index was down 0.22%; WTI crude was up 0.75%; Brent crude was up 0.88%; Lun copper was down 1.31%; and gold was up 1.50%. American beans are up 0.22%; American soybean meal is up 0.27%; American soybean oil is down 0.52%; American sugar is up 1.80%; American cotton is down 0.56%; the BDI CRB index is up 0.57%; the BDI index is down 7.59%. Offshore renminbi CNH rose 0.20 per cent, while Deutsche Bank X-Trackers Castrol Shanghai and Shenzhen 300 Chinese A-share ETF fell 0.47 per cent.
The US side asked the Chinese side to close the Consulate General in Houston. The Ministry of Foreign Affairs: strongly condemns that the Chinese side will make a legitimate and necessary response.
Foreign Ministry spokesman Wang Wenbin said at a regular press conference on July 22 that on 21 July, the US side suddenly asked the Chinese side to close its Consulate General in Houston, which was a political provocation unilaterally initiated by the US side against the Chinese side, seriously violated international law and basic norms governing international relations, seriously violated the relevant provisions of the Sino-US consular treaty, and deliberately sabotaged Sino-US relations. The Chinese side strongly condemns it. The Chinese side urges the United States to immediately reverse the relevant erroneous decision. Otherwise, China will certainly make a proper and necessary response.
He said: for some time, the US Government has constantly blamed the Chinese side, carried out stigmatization attacks on China, attacked China's social system for no reason, unreasonably created difficulties for Chinese diplomatic and consular personnel in the United States, and intimidated and cross-examined Chinese students studying in the United States. confiscation of personal electronic equipment, or even detention for no reason. The unilateral time-limited closure of the Chinese Consulate General in Houston by the United States is an unprecedented escalation action taken by the United States against China.
Wang Wenbin said: China has always adhered to the principle of non-interference in the internal affairs of other countries, and infiltrating and interfering in the internal affairs of other countries has never been the gene and tradition of China's diplomacy. Chinese diplomatic agencies in the United States have always been committed to promoting mutual understanding and friendship between the peoples of China and the United States. China facilitates the performance of the duties of US diplomatic agencies and personnel in China in accordance with the Vienna Convention on diplomatic Relations and the Vienna Convention on Consular Relations. On the other hand, the US side imposed restrictions on Chinese diplomats stationed in the United States for no reason in October last year and June this year, privately opened China's diplomatic pouch many times and seized Chinese official supplies. Due to the recent wanton stigmatization and incitement of hatred by the US side, the Chinese Embassy in the United States has recently received bombs and death threats against Chinese diplomatic agencies and personnel in the United States. The website of the US Embassy in China often openly publishes articles attacking China. By contrast, it is clear at a glance who is interfering in the internal affairs of other countries and who is engaged in infiltration and confrontation.
He said: the US side's claim that US-China relations are not equal is a common excuse of the US side and has no reason at all. In fact, in terms of the number of Chinese and US embassies and consulates in each other's countries and the number of diplomatic and consular personnel, the United States is far more than China. "We urge the US side to immediately reverse the relevant wrong decision. If the US side insists on having its own way, the Chinese side will certainly take measures to resolutely deal with it. "
Earlier, according to US sources, before 4: 00 p.m. on July 24, the Chinese Consulate General in Houston will be asked to close and its staff will be asked to leave.
"Black Swan" raid, how to get to A-share?
Affected by the sudden news that the US side asked the Chinese side to close the Consulate General in Houston, the exchange rate of the RMB against the US dollar changed from rising to falling on July 22. The onshore RMB rose more than 300 basis points against the dollar in the morning, breaking the 6.97 mark and rising as high as 6.9650 for the first time in three months. The offshore renminbi also rose nearly 100bp, rising as high as 6.9649. However, the onshore and offshore renminbi fell rapidly in the afternoon, with the offshore renminbi plummeting 300 basis points against the dollar, falling below the 7 mark, while the onshore RMB plunged nearly 250 basis points against the dollar, also losing the 7 mark.
So, will the A-share market be affected by this "black swan" incident?
Since the Shanghai Composite Index hit a new high for the year of 3458 points in intraday trading on July 13, the market has held back first and then rose, continuing to fluctuate in a wide range. Analysts believe that in the first three trading days of this week, the military industry weight and medicine growth rotation, the theme persistence is not obvious, so the index does not show obvious structural characteristics. As of July 22, the Shanghai Composite Index rose 0.37% to 3333.16 points; the Shenzhen Composite Index rose 0.89% to 13657.03 points; the CSI 300 Index rose 0.5% to 4714.45 points; and the gem Index rose 1.19% to 2769.03 points. In terms of the futures market, IF2008 closed up 0.58% and JH 2008 closed up 0.21%. Jet IC 2008 closed up 1.02%.
Guotai Junan Futures Stock Index Futures researcher Mao Lei told Futures Daily that Sino-US relations have suddenly tightened, and the impact on A shares mainly depends on the market's understanding of the incident. "if the market understands the incident in place, the market mood will not be too panicked. However, if the market lacks authoritative voices to explain the closure of the consulate general, there may be significant adjustments in stock indexes and commodities, and safe-haven assets will continue to rebound."
"after the news, the FTSE A50 futures, the Hang Seng Index and the offshore RMB exchange rate once plummeted in a straight line, but then all rebounded obviously. judging from the current market performance, the impact of this news is not significant." Guo Ziran, a researcher on Guangzhou Futures Stock Index Futures, believes that in view of the current domestic economic recovery, the logic of accelerating the inflow of incremental funds such as partial public offering funds and foreign capital, and the transfer of residents' wealth allocation from real estate to the stock market has not been broken. if there is a similar black swan incident, the short-term adjustment of the domestic index will be a good opportunity to increase the position.
Affected by the breaking news, the dollar index rose in the short term, but then continued to fall. As of the early morning close, the three major indexes of US stocks collectively closed higher, with the Dow up 0.62%, the S & P 500 up 0.58% and the Nasdaq up 0.24%.
Precious metals "rising tide lifts all boats", and the ratio of gold to silver continues to fall.
Since the beginning of this year, under the dual stimulation of epidemic risk aversion and central bank easing, the precious metal plate as a whole has performed brightly. This week, the precious metal market started again, internal and external gold and silver prices have reached new highs, gold and silver ratio continues to fall.
After closing up more than 5 per cent on Tuesday, the main 2012 contract of domestic Shanghai silver futures rose directly to close at 5123 yuan / kg on Wednesday, a new high in more than seven years. Domestic Shanghai gold futures also hit a new high of 418.80 yuan / g since its listing on Wednesday. Due to the hot market, gold and silver have also been searched on Weibo.
In the international precious metals market, gold futures in New York hit a new nine-year high of 1866.8 US dollars per ounce on Wednesday, while silver futures in New York once stood above 23 US dollars per ounce, a new high in nearly six years. At the same time, the silver rose rapidly, pushing the ratio of gold and silver inside and outside the market down to around 80. As of the early morning close, silver was up more than 8.26% and gold closed up 1.46%.
Du Fei, a non-ferrous researcher at Jinrui Futures, told Futures Daily that US Treasury yields are mainly anchored by precious metals. Recently, US Treasury interest rates have fluctuated around 0.7%, but real US bond yields have continued to decline. the lowest has fallen to-0.87%, and the difference between the two also confirms the rising inflation expectations. Meanwhile, 27 EU leaders have reached agreement on a multi-year budget and a proposal for a new crown pneumonia recovery fund. It is understood that this is an agreement of 1.8 trillion euros, including a budget of 1.07 trillion euros for 2021-2027 and a "next-generation EU recovery" rescue fund of 750 billion euros. The euro rose after the news, pushing down the dollar index to 95, which was also the main factor contributing to the rapid rise in precious metals.
Wang Yanqing, a non-ferrous researcher at CITIC Construction Investment Futures, believes that, on the one hand, the EU economic recovery plan has been adopted, and the next round of economic stimulus measures in the United States are also under discussion, and the market expects that monetary liquidity will further increase. At the same time, the recent research and development of new crown pneumonia vaccine is good, the market expects the economy to recover more quickly, and inflation expectations continue to rise, highlighting the value preservation of precious metals. On the other hand, gold and silver prices have hovered at the important level before, once breaking through the early important pressure level or integer level, the enthusiasm of investors to enter the market to do long will be greatly stimulated, thus condensing into an obvious trend.
In addition, gold investment demand supports gold prices. The central bank continues to increase global gold ETF holdings has exceeded 3600 tons, reaching an all-time high. Strong ETF demand for gold offsets weak demand for physical gold. At the same time, central banks continue to increase their gold holdings, with global official gold reserves totaling 34905 tons as of May.
Unlike the foreign exchange and equity markets where there has been a "reversal", the precious metal spot market remained strong yesterday. During the daytime trading session yesterday, the domestic futures market closed mixed, the precious metal plate led the rise, Shanghai silver sealed the trading limit, and Shanghai gold rose nearly 3%. Later, when the market opened at night, the precious metal plate continued to rise during the day, with Shanghai Silver opening 5.52% higher and Shanghai Gold opening 0.24% higher. In addition, silver trading on the Shanghai Gold Exchange rose by the daily limit of 5000 yuan per kilogram in early trading yesterday, and at one point it rose nearly 7 per cent at the beginning of the evening session.
Under the hot market, the Shanghai Gold Exchange (hereinafter referred to as the Shanghai Gold Exchange) issued a notice yesterday saying that in view of the sharp fluctuations in silver prices reaching the limit, according to the relevant regulations, it is proposed to adjust the margin ratio and the limit for silver extended contract trading according to unilateral market conditions.
According to the announcement information, if there is a unilateral market in the silver extension contract on the same day, the margin ratio of the silver extension contract will be adjusted from 10% to 13% from the end of the day, and the limit of rise and fall will be adjusted from 9% to 12% from the next trading day. The Shanghai Gold Exchange increased the silver margin by 3%, which correspondingly reduced the leverage ratio of silver speculation. Previously, it could be leveraged up to 14 times, but now it can be leveraged up to 7 times. In the announcement, the Shanghai Gold Exchange also reminded investors to operate cautiously, invest rationally, and reasonably control the size of their positions to ensure the stable and healthy operation of the market.
In the international market, COMEX silver futures rose to 8% yesterday, standing above the $23 / oz mark, while the world's largest silver ETF silver ETF-iShares (SLV) rose 5%. The $11.1 billion iShares silver trust (SLV) attracted capital inflows for the fifth day in a row.
It is worth noting that unlike the previous safe-haven-driven rise in precious metal prices driven by gold prices, silver has risen much more than gold in the process of this rise.
Du Fei believes that in a monetary easing environment, more money flows to precious metal assets, but as the global economy gradually recovers after the end of the blockade, strong industrial demand will continue to drive a rebound in silver prices. What is different from the previous precious metals rally is that this rally is more due to the impact of currency overissuance, while the previous rise is more driven by safe-haven demand.
"due to the gradual recovery of the economy, industrial demand is gradually picking up, similar to the non-ferrous metals sector, the industrial demand for silver has also been boosted, driven by both financial and industrial attributes, silver performance is more prominent." Wang Yanqing believes that the rise in silver this round stems from the superposition of investment and industrial demand, which generally lasts for a short time, while investment and industrial demand can become long-term sustainable support.
Cao Mengyang, a precious metals researcher at Zhaojin Futures, believes that silver prices tend to perform better than gold when inflation expectations pick up, while current US debt interest rates remain stable at low levels, inflation expectations continue to rise, and real interest rates continue to refresh record lows, which is the most aggressive period for silver prices. At the same time, the rapid rebound of silver has also been affected by mine-side disturbances, with South American silver mine production falling and supply-side disturbances increasing since the March outbreak. Moreover, the demand of electronics, photovoltaic and other industries is expected to recover, which has also stimulated the rising market of silver. In addition, this strong rebound is related to the value depression of silver. After gold stood firm for thousands of years, the investment value of silver was revealed.
At this stage, silver is expected to continue to achieve stronger market performance than gold, benefiting from the strength of the industrial products sector and overseas inflation expectations. However, it should be noted that the core driver of silver price still depends on the trend of gold, because the center of silver price is determined by gold price, which mainly reflects its financial attribute. The price elasticity of silver price relative to gold price center is determined by industrial attribute, which mainly reflects the influence of its industrial attribute on the price ratio of gold and silver. " She said.
Wang Yanqing told Futures Daily that the gold and silver ratio has been continuously repaired in the past four months, and the current outer plate gold-to-silver ratio has returned to around 80, while its historical average is 70. Historically, the gold and silver ratio in the bull market of precious metals has continued to decline, and in the context of economic recovery, the industrial demand for silver will also support its price stronger than gold. Therefore, there is still room for gold and silver to fall back, and silver has more potential to rise.
Crude oil inventories of API and EIA last week were much higher than expected, and the BDI index fell 7.59%.
Oil prices continued to fall on Wednesday amid fears that the rise in new cases of Crown pneumonia in the United States could further weaken fuel demand in the world's largest oil consumer, as crude oil inventories in the United States API and EIA both rose faster than expected last week. As of the early morning close, WTI crude oil was up 0.75%. Brent crude was up 0.88%.
According to the latest figures released by the American Petroleum Institute (API) on July 22nd, API crude oil stocks rose 7.544 million barrels to 531 million barrels in the week ended July 17, and are expected to decrease by 1.95 million barrels. On the evening of July 22nd, the data released by the US Energy Information Administration (EIA) showed that the EIA crude oil inventory change in the United States actually increased by 4.892 million barrels in the week ended July 17, which was much higher than expected (a decrease of 589000 barrels), which increased the market pressure on the oil market oversupply and diluted the boost brought to the oil market by the EIA and API crude oil inventory declines far more than expected last week.
Edward Moya, a senior market analyst at OANDA in New York, said that after the API report showed a sharp increase in inventories and Trump warned that the new crown pandemic in the United States could worsen, the rise in oil prices was hampered and the outlook for crude oil demand took a double whammy.
It is worth noting that the Baltic dry bulk index (BDI) has fallen sharply for two days in a row, down more than 10 per cent this week. Analysts believe that shipping is likely to be significantly reduced due to concerns about the epidemic and future demand, as well as increased geopolitical risks. As of early this morning, the BDI index closed down 7.59 per cent.
The off-season is not weak, and the market confidence in black goods has strengthened.
On Wednesday, most varieties of black closed higher, with rebar 2010 up 1.31 per cent and iron ore 2009 up 1.14 per cent, but there was a divergence in night trading, with iron ore up 0.35 per cent and rebar down 0.03 per cent as of last night's close.
Tao Rui, director of the China Merchants Futures Black Industry Group, told Futures Daily that the recent trend of black commodities did not reflect the off-season factors, on the contrary, there was a general rise in all varieties, mainly because the total amount of funds in the market was abundant, so that the risk appetite of participants in all aspects of the market increased, the current participation increased, and the desirable inventory center also increased, and speculative demand partly made up for the absence of terminal demand. The market shows strong confidence in the expectation of the future total demand and even the construction intensity.
Tao Rui believes that investors need to pay close attention to the performance of rebar market demand in the next two weeks. Judging from the high-frequency data currently tracked, terminal demand has shown signs of marginal improvement in the past two days. Therefore, before the stock removal is expected to be falsified continuously, the state of high inventory, flat disk or appropriate discount will continue, while the rising level of the disk will be more difficult to sustain with the intervention of a large number of basis participants in the near future.
In terms of terminal demand, Tao Rui believes that the total market demand is still guaranteed, but not more than May-June, the key lies in the construction intensity. "it should be noted that the issuance of special bonds and real estate construction in the first half of 2020 are mainly concentrated in May-June, and there is an obvious rush at the terminal, while the construction period in the second half of the year is longer, so the possibility that the construction intensity is weaker than May-June and the pressure on the supply side may increase."
In addition, Tao Rui believes that in the context of the overall upgrading of electric furnace technology, the elasticity of supply in 2020 is greater than that in 2019, so steel prices are more likely to touch the price ceiling, in which the shortage of scrap steel is crucial. From the recent high-frequency data, there is no shortage of short-term scrap supply. At the same time, with the promotion of the replacement policy of home appliance vehicles, the subsequent scrap supply is not expected to shrink significantly.
Scan the QR code and join the SMM metal communication group.