Market review:

China stocks declined before the Dragon Boat Holiday, with SHA fell about 0.22%.Investors mostly stayed cautious with worse than expected trade data and more macro data due this weekend, including CPI, PPI, New Loan and Money Supply.

Research Notes:

Money outflowed from Electronics, Entertainment and Software sectors the most.

Shanxi Black Cat Pyrogenation Chemical Co.（601015.sh) rallied to limit-up for its restructure plan to cut some business lines that not making profit, as well as crude oil rebound supported the prices of its products.

As most international institutions, such as IMF and World Bank, and domestic gov branch, such as National Bureau of Statistics are cutting growth perspective for China, it’s difficult for investors to push SHA further for the rest of June.

But Money are still chasing those shares in Smart Household Electronics, Online Commerce and Lithium Battery.

In commodity market, short squeeze for Soybean meal, Rebar and Aluminum continued with many shorts cut the loss with margin hiked.

Many major soybean and rapeseed producing areas, such as US, China, Argentina and Western Europe are suffering from summer flood, which sent price of soybean near the new height.

CNYUSD stayed steady and for any rebound in SHA, we expected to happen after the June Fed minutes, when Yellen can confirm that the easy monetary policy can go on for several months more, which in our opinion, it’s more supportive for commodities rather than China equities, especially those big caps.

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