A second outbreak of overseas epidemics triggered market concerns, and international oil prices fell sharply on Wednesday. As of Wednesday’s close, the NYMEX WTI crude oil futures December contract closed at $40.03/barrel, a decrease of 4%; the ICE Brent crude oil futures December contract closed at $41.73/barrel, a decrease of 3.31%.
On Wednesday, LME three-month copper once exceeded the integer mark of US$7,000/ton, hitting the highest US$7,034/ton, a new high since June 2018. Affected by the appreciation of the RMB, the recent increase in Shanghai copper has been significantly lower than that of LME copper. Chile’s Candelaria copper mine announced it would suspend operations starting Tuesday after two of its unions went on strike. Workers at Chilean state-run Codelco took to the streets on Monday to protest against layoffs announced by the company during the pandemic.
On October 21, the onshore RMB exchange rate against the U.S. dollar rose above the 6.65 mark, and the offshore RMB exchange rate against the U.S. dollar once rose above the 6.63 mark, with a single-day appreciation of more than 300 BP. Both hit new highs since July 2018.
International oil prices fell sharply
Second outbreak of overseas epidemic triggered market Worrying, international oil prices fell sharply on Wednesday. As of Wednesday’s close, the NYMEX WTI crude oil futures December contract closed at $40.03/barrel, a decrease of 4%; the ICE Brent crude oil futures December contract closed at $41.73/barrel, a decrease of 3.31%.
As for the trend of the crude oil market, Li Wanying, a senior energy analyst at Donghai Futures Research Institute, believes that the current market is still waiting for direction selection signals.
It was learned through the 23rd meeting of the Joint Ministerial Monitoring Committee (JMMC) of OPEC and its production reduction allies held on October 19 that in September 2020 The overall production reduction compliance rate of OPEC and its production reduction allies reached 102%, the highest level since May 2020 (excluding voluntary excess production reductions made by Saudi Arabia, Kuwait and the United Arab Emirates in June 2020).
Under such circumstances, she believes that it is not very likely that OPEC will completely change its thinking on production cuts in the fourth quarter. However, under the premise of overall shrinking demand, some finances are highly dependent on crude oil. There are doubts whether exporting countries will be able to fully fulfill their obligations in the future, and the effective boost to market prices from production cuts will be diminishing at the margin.
In fact, the epidemic has continued to spread in the United States and Europe recently, and many countries have introduced more stringent social closure measures, such as curfews. Under such circumstances, the CFTC position reflects the long position Funding is more cautious.
In the post-epidemic context, it may take more time to restore the crude oil price spread structure to the backwadation structure. At the supply and demand level, refined oil consumption is still not optimistic, and the crack price difference remains low. In the United States, the number of rigs drilled by Baker Hughes has increased in recent weeks, reflecting that current oil prices can cover part of the production costs of drilling wells in the Permian production area. Under such circumstances, Li Wanying said that she still maintains a neutral judgment on oil prices in the fourth quarter.
She suggested that further attention should be paid to changes in the macro environment in the coming period. For example, the U.S. election is about to take place in early November, and the different attitudes of Trump and Biden toward the energy and environmental industries may affect crude oil supply. In addition, factors such as the epidemic, vaccines, and Brexit may cause a certain degree of disruption to oil prices.
In fact, in her opinion, there are many macro events in the fourth quarter, but in the absence of particularly good news, it is difficult for oil prices to make a breakthrough, and there is a high probability of maintaining a wide range of oscillations. .
Under the background of loose global liquidity, copper prices are expected to continue to rise
When it comes to the recent rise in copper prices at home and abroad, Wang Yingying, a nonferrous researcher at Galaxy Futures Commodity Department, believes that it is mainly due to the unprecedented release of water by global central banks this year.
“Against the background of loose global liquidity and the steady recovery of the global economy, these have provided a relatively good condition for copper prices to rise.” Wang, a metals analyst at Nanhua Futures Still Jian explained.
It is understood that the current global explicit inventory of refined copper is at a historical low, and the global supply of copper concentrate has remained tight in the near future, and continues to Protests by Chilean copper mine workers may evolve into large-scale strikes in serious cases, thereby exacerbating supply constraints. On the demand side, investment in power grids and consumption of automobiles and home appliances are expected to maintain high growth rates. Under such circumstances, Wang Yingying said that with the recent strong appreciation trend of the RMB, although the overall increase in Shanghai copper is likely to be less than that of LME copper, the oscillation may still be stronger.
Wang still agreed with this. In his opinion, in the future, Shanghai copper will most likely maintain an upward trend under the condition of tight supply and steady recovery of demand. In particular, the United States is about to launch a new stimulus package in the later period, and liquidity easing is expected to continue further. In addition, China’s economy has recovered rapidly after the epidemic, and the domestic new crown vaccine is currently in the vaccination stage, which is a favorable guarantee for the continued smooth recovery of the economy in the later period.
However, he also admitted that there will still be some risks in the copper market for some time to come, especially the US election and the second outbreak of the new crown epidemic, which will have a certain impact on copper prices. . </pPreventing and defusing financial risks and tightening monetary policy will further be detrimental to the stock market. "Mao Lei said.
In the view of Zhao Xiaoxia, chief researcher of Green Dahua Futures Financial Futures, the A-share market is likely to strengthen during the year. “After all, the economy has not yet fully returned to normal. Therefore, in the future, monetary policy is expected to continue to exert force, and the RMB exchange rate has also been relatively strong recently. Under such circumstances, the attractiveness of A-shares is still relatively strong. ” she said.
However, Zhao Xiaoxia also admitted that there will still be certain risk factors in the A-share market for some time to come. For example, monetary policy may be tightened more than expected. In addition, the U.S. election will further suppress risk appetite.
Mao Lei suggested that investors should mainly wait and see in the short term. After all, the trading volume of the two cities continues to fall, and before the final boots are launched, , it is expected that the futures index will hardly have a relatively obvious trend market, and there is a high probability of wide-range oscillations. At the upper edge of the range, it is more difficult to rebound, and it is easier to fall than to rise; at the lower edge of the range, there are still policies that are warmer, Support for economic recovery. In view of this, he told a reporter from Futures Daily that in the later period, based on changes in fundamentals, after uncertain events occur, opportunities can be chosen to follow the formation of trends and participate in a round of market prices.
As for futures, Zhao Xiaoxia suggested that investors should focus on the long term. Currently, stock index futures are still at a discount, and using futures instead of ETFs will result in excess returns. Investors can adopt low-frequency and low-position approaches to do long-term Investment.
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