Market review:

China stock declined with risk aversion before the Fed FOMC meeting.

Research Notes:

SHA fell about 0.1% with money outflowed from Electronics, Engineering Equipment and Telecommunication sectors the most. Hubei Zhenhua Chemical CO.(603067.sh),a producer of chroium salts, rallied to limit-up as money chasing this newly listed company.

DXY weakened further overnight as investors believed there should be no hike in FOMC meeting, which could left only one hike chance in Dec. CNYUSD stayed stable with the unusual up-bend of shibor and hibor rates in the near term while PBOC in no hurry to provide liquidity to ease the tightening while National Day holiday could bring more liquidity demand. Many investors believed that it could be a method for PBOC to control the RMB exchange rate, especially to avoid it falling further. In commodity market, coals, manganese alloy and palm oil rallied to limit-up as seasonality demand would increase for coals and Malaysia government raised the export tax for palm oil, which already suffered from production loss from el nino. Despite some well expected risk aversion before FOMC and short term RMB liquidity issue, we still are optimistic on sectors which benefit from Apple iPhone, Nuclear Power and Electronic Cars. Investors can increase their risk exposure if SHA fell toward 3000 psychological threshold and expect a rally after Fed decision.