Market review:

China stocks generally stayed firm with SHA rose about 0.13%.The overnight employment number of US was mixed yet Fed official kept saying the rate hike this year still is still possible and risky assets took another hit.

Research Notes:

In equity market, money flowed into Complex Material, Construction and Entertainment sectors the most. China Railway Group(601390.sh) rallied to limit-up as investors positioned for the main themes of G20 meeting, including SOE reform and One Belt One Road, which could boost business of the rail way group.

DXY rebounded from the low with hawkish speech from Fed official and it pressured CNYUSD to new low since Aug 10th.In commodity market, iron ore, lead and sugar led the rally yet oil seeds fell with CME agricultures on improved weather perspective in US Midwest. Iron ore got some support from rail way sector. Sugar futures climbed on the damage report from Southern China which hit by typhoon recently. As G20 meeting approaching, money are rotating into construction, international trade and railway sectors, the only concern it’s that recent improvement of US econ data led to more talk of policy change of federal reserve which place a risk for most risky assets. We maintained our mid-term target for SHA 3200 yet the volatility could increase with US GDP data release next week as well as the start of Jackson Hole Symposium. Profit taking in the 1st half of the next week is quite likely.