Home > Dec 2017 > Dec 6, 2017 Shanghai Copper Futures down over 3%, Nikeii down 2%

Dec 6, 2017 Shanghai Copper Futures down over 3%, Nikeii down 2%

December 6th, 2017

Tonight Australia missed GDP estimates and we continue to see the slowing down of China Liquidity hit the Metals and the Stock exchanges.  Our Future is down (finally) .13% leading into the europe open. The USD is again strong against the pairs except for the Kiwi. Oil is down when API surprised showing a huge build of 5.481 million barrels of United States crude oil inventories, the estimates were for draw down. Bitcoin is now, omg, over 12,000 with most of China Biz being traded in Hong Kong now after the PBoC crack down. Hello, while I am writing this the Yen is pushing up on the USD….Risk Off is our play of the day….finally a really nice down day should be coming.

Dec 2017

  • Trading_Nymph

    Color on Copper..BEIJING, Dec 6 (Reuters) – Shanghai copper fell more than 3
    percent on Wednesday, tracking a steep drop on the LME as
    investors wound in profits on concerns China could see a weaker
    first half of next year.
    Analysts said besides a rise in copper inventories, the
    selloff was fuelled by concerns about liquidity tightness in
    China towards the year-end, amid a government-led deleveraging
    push, and slowing investment in the country’s power sector, a
    key driver for copper.
    The “sluggish investment in power indicates copper demand in
    China may remain weak for a while,” Helen Lau, an analyst at
    Argonaut Securities, wrote in a note, adding that she expected
    to see “more downward pressure” on the metal over the short
    term.

    FUNDAMENTALS
    * SHFE COPPER: The most-traded Shanghai Futures Exchange
    copper contract fell 3.8 percent in morning trade
    before trimming the losses to trade down 3.1 percent at 51,420
    yuan ($7,774.18) a tonne by the mid-session interval, and still
    on course for its biggest one-day drop since November 2016.
    * TECHNICALS: The ShFE copper contract’s slump took it below
    the 200-day moving average (DMA), a technical indicator, sending
    a bearish signal to markets.
    * LME COPPER: Three-month copper on the London Metal
    Exchange was trading up 0.3 percent at $6,561 a tonne by
    0441 GMT, having plummeted 4.2 percent on Tuesday as inventories
    rose by over 10,000 tonnes. Prices saw the steepest daily drop
    since July 2015 in the previous session.
    * SUPPORT: LME copper may test support at $6,492 a tonne, a
    break below which could cause a loss to the next support at
    $6,451, according to Reuters analyst Wang Tao.
    * PUTS: Traders pointed to a large 3,500 strike at $6,500 in
    December copper put options, which could drag on prices.

    * SELLING: Traders noted consistent buying but one said it
    was not sufficient to stop copper’s selling momentum which was
    in line with profit taking typically seen at year end. They are
    also wary that further weakness could spark margin calls by a
    large Shfe copper long.
    * NICKEL: Shanghai nickel was down 4 percent, tracking a
    4.6-percent fall on the LME in the previous session to
    the metal’s lowest level in nearly two months, as prices cracked
    below the 100-DMA, sparking more chart weakness.
    * ZINC: ShFE zinc was down 2.6 percent at 24,750
    yuan a tonne.
    * ALUMINIUM: ShFE aluminium was down 2.1 percent in
    Shanghai, hurtling closer to support at 14,000 yuan a tonne, and
    has now lost over 17 percent since Sept. 20 as winter production
    cuts in China turned out to be less severe than expected.

    METALS NEWS
    * COPPER: Indonesia said on Tuesday it planned to acquire
    Rio Tinto’s, stake in the Grasberg copper mine
    operated by Freeport-McMoRan Inc, potentially solving a
    drawn-out problem for all three parties.
    * BATTERIES: Glencore has increased production of
    metals used to make electric car batteries faster than its major
    mining rivals, according to an industry-wide analysis.

  • Trading_Nymph
  • Trading_Nymph
  • panther341

    so CBOE bitcoin will start trading next week and CME the following week. Indications are that because of the high volatility – the margin will be very high for the futures contract – like 35%. For comparison – on the /ES, which is a $131,500 notional product at today’s price (2628 * 50 – as the multiplier on /ES is 50), the initial margin is $4,950 (or 3.75%) – which could go up if you are losing money or if the volatility increases significantly.

    Bitcoin supposedly will be a 5 bitcoin contract in futures – at 13,000 = $65,000 notional value, and proposed 35% margin on that is 22,000 to 23,000. But you will have a better counterparty. I am glad I don’t have market making job in this – hedging? …… 🙂

  • panther341

    I am assuming you are not affected by the current round of fires? Hope all is well.

  • panther341

    for the record – I started playing Christmas music yesterday. My tree is up – but not decorated (except for lights).

  • panther341

    crude oil: large build in products. gasoline and heating oil – and remember that heating oil is the same product as diesel.

  • panther341

    theme on CNBC is that high tax companies are being bought and lower tax companies are being sold. One dude says to buy small caps that pay taxes.

  • panther341
  • panther341

    I just listened to a webinar through my broker on bitcoin. It is VERY confusing. LOL

    The CBOE product starts trading Sunday night at 6:00 PM eastern when futures open. The CME product starts Dec. 17 at same time.

    CBOE contract is 1 bitcoin. CME product is 5 bitcoins. So they are not interchangeable and will have different symbols.

    CBOE and CME are using different margin requirements for initial margin: one is 35% and one is 33%. Those are the exchange requirements and my broker said their requirements might be higher – and the exchanges can always raise margin requirements as well. DO you remember how they raised margin requirements on gold and silver when things got nutty 5 or 6 years ago?

    My broker will NOT be offering either product immediately for trading but is waiting for liquidity and probably some other things. I know of another broker which is planning to start offering the CME product right away (Dec 17) but not the CBOE product. I am sure they are going to be all over the place.

  • panther341

    the carnage in gold and silver has to be related to the bubble in bitcoin.

  • panther341

    we had snow here in Austin yesterday and it is sort of still here overnight. a whole 1 or 2 inches at most. I told my sister they cancelled school for 0.5 inches. Our low temp until yesterday was 39, but the high temp yesterday was 41. This will knock the leaves off the trees and we will have to rake before CHristmas!

  • panther341

    Friday – there is carnage in gold and bitcoin today. LOL

  • panther341

    btw – crude oil is firmly in backwardation. There is a nominal differences out 5 months to the upside – but not more than about 10 cents and in couple of months it is like 1 penny. And out 1 year (Dec 2018) – the price is over 1.50 lower. That is what OPEC wants. Means selling forward production by US producers is not profitable, and neither is the carry trade.

  • panther341

    I keep hearing speculation that the CME may change their contract from 5 bitcoins to something less – like 2 or even 1 – in which it becomes more fungible with the CBOE contract. I would think it would be more agreeable to the market makers.

  • panther341

    Finviz doesn’t have the FANG futures. It is traded only on ICE, and my broker makes you pay foe the data feed in order to trade ICE or even get the data. But I understand the volume/liquidity is lacking. This has come up in relation to bitcoin with competing contracts coming out basically at the same time.

  • panther341

    Finviz also doesn’t have the ultrabond which is pretty liquid and some other products. BTW. The ultrabond is really the 30 year bond – and the bond usually called the 30 year is really about 22 years. LOL

  • panther341

    I actually touched someone else’s iphone x on Wednesday. lol.

  • panther341

    Sunday night. CBOE website crashes.

    CBOE post: “Cboe will halt trading in its contract for 2 minutes if the best bid in the XBT futures contract closest to expiration is 10 percent or more above or below the daily settlement price of that contract on the prior business day.” So…….daily halts?

  • Trading_Nymph

    rofl…I have two friends on waiting list, that is the closest I have come.

  • Trading_Nymph

    ouch.

  • Trading_Nymph

    didn’t think they would.

  • Trading_Nymph

    I have the tree up with only one strand of lights so far on, lol.

  • Trading_Nymph

    MANY of my friends are…been crazy. Plus, on of my friends have been hit hard with asthma due to smoke.

  • panther341

    Take care of yourself and friends and stay safe!