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Market review: January 11, 2017

Fang submitted 2017-01-11 16:01:36

Market review:
China stocks declined as investors taking profit before Fed Chair Yellen speech this Thursday.
Research Notes:
Money outflowed from Finance, Agriculture and IT sectors the most with SHA declined about 0.57%.
DXY remained weak overnight and can’t match higher beyond 102, while investors are waiting for Yellen to offer more clue on the schedule of rate hikes in 2017.CNYUSD fell to 6.93 level with CNH still stronger than CNY as pboc
is comfortable to keep RMB expensive off shore .
In commodity market , egg , iron ore and copper led the rally. For egg investors got some concern on the bird flu seasonal outbreak in spring to affect supply. And ndrc once more vowed to limit the output of coal , steel and coke , which also supported prices of metals and fuels.we considered ndrc would play as the utmost for commodities for another season.
As the provinces’ two sessions is coming, SOE reform sectors will be a buying opportunity. But we think the rebound of index is short-lived for about one or two days. As Trump would enter Whitehouse and spring festival would start by the end of month , some investors could play conservative . We recommend sectors such as food & beverage , leading coal miners , steel makers and new energy . Investors can use index futures and options to hedge the holiday downside and adopt the alpha hedge strategy.

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