Thousands Of Shares Down! The Market Is Crazy! Cotton, Cotton And Other Commodity Futures Are Down. Where Is The Market Going?

The news is not calm before and after the long holiday of the Dragon Boat Festival. The world's two largest economies seem to be launching a trade war.

First in June 15th, the United States government announced that it would levy a tariff of 25% on imports of goods from China, about $50 billion, of which about 34 billion US dollars were imposed tariff measures since July 6, 2018, and at the same time, public tariffs were imposed on Tariffs of about 16 billion dollars.

The Chinese government immediately counterattacked, and the Sino US trade war suddenly escalated.

The US cotton quilt added a 25% tariff, which resulted in a sharp fall in ICE cotton on two consecutive days on Friday and Monday. The main contract in December dropped 5.19 cents to 87.99 cents / pound in the two trading days after the Chinese market closed.

In June 19th, the Chinese market opened for the first time after a long holiday.

The Trump administration announced plans to impose a 10% tariff on the additional $200 billion of Chinese goods, and said that if China struck back, the United States would continue to levy taxes on another $200 billion of Chinese goods.

China's Ministry of commerce then resolutely counterattacked.

The expansion and intensification of Sino US trade war has become the last straw to overtake domestic and foreign markets.

On the same day, under the influence of the trade war, the market risk preference declined rapidly and the stock exchange merchants killed three.

Shanghai and Shenzhen two cities thousand shares limit, the Shanghai composite index is even broken 3000, the lowest 2971, the domestic panic selling, mourning everywhere.

In the exchange rate market, the offshore renminbi fell below the 6.47 barrier against the US dollar, hitting a five month low, expanding to more than 500 points.

Commodity markets have plummeted.

Worries surrounding the Sino US trade situation have become a key driver of the current market.

It is hard to say whether it will be further upgraded because it has been changing and will often hurt market sentiment.

For the domestic commodity futures market, it also has a profound impact. Cotton, cotton yarn and other varieties have been down, and PTA has fallen by more than 2%.

Zheng cotton futures main contract 1901, in the 17600 line of continuous consolidation of 8 trading days, today broke down to 16745 yuan / ton, creating the May 16th market since the start of the new low.

At present, the price is only a step away from the market starting point of 16325 yuan / ton.

In a short span of more than half a month, the cotton market once placed high hopes in the market has been losing ground under the impact of continuous throwing and storage of new deal, issuance quota and the escalation of Sino US trade war.

Why did Zheng cotton collapse like this?

Largely due to

Fermented and worried about the continued escalation of Sino US trade war.

Trump threatens to impose a 10% tariff on the list of $200 billion, which is bound to hurt China's export of textiles and clothing to the United States.

The annual import volume of the whole upstream cotton is about 1 million 150 thousand tons, and the total trade volume is about 2 billion 900 million US dollars. Among them, the amount of cotton in the United States is about 604 thousand tons, and the total trade volume is about 1 billion 550 million dollars.

However, in 2017, China's textile and clothing exports totaled 268 billion 600 million US dollars, of which US $45 billion 400 million was exported to us textiles and clothing, and the downstream volume was much larger than the upstream.

If the trade war continues to escalate and expand into the textile and garment industry, 10% of tariffs will seriously affect China's exports to the United States, and Southeast Asian competitors may fill our vacant market. The longer the replacement time, the more difficult it is to recapture the market.

This is a potential big loss for cotton consumption in China, and it is bad for Zheng cotton for a long time.

Judging from today's external market situation, the ICE cotton main contract was also in the same downturn under the impact of systemic market risk. As of 17:50 p.m., the lowest price of Asian electronic disk was 85.20 cents / lb, which fell to 85.20 from 92.90 cents / pound in three trading days, and the total decline was 7.7 cents.

At present, due to the escalation of Sino US trade war, the US cotton will lose China's largest consumer market in the world. The price reversal is inevitable, but the focus of the market is still on the production and supply of the new year, which will restrain the callback space of the price.

The impact of trade war on the market is not only a direct impact.

The gaze has been further extended to the fundamentals.

In the process of Global trade rebalancing, in the process of raising interest rates in the United States, economic, trade, exchange rate, geopolitics and other perspectives will become the wrestling arena of both sides.

Sino US trade frictions will continue to undergo long-term seesaw warfare in the future, which will exist for a long time and continue to ferment.

The rebalancing of Global trade will be a long process of negotiation and negotiation, which will produce more scattered uncertainty on the global market.

For the future market, we tend to face the challenges of the above risk factors in the short-term market.

All kinds of uncertainties are intertwined, and the market still needs to wait more patiently.

Waiting for the trade war to "fight with peace and fight with war", wait for the clarity of the policy expectation, and wait for the policy to further clarify the signal.

Whether the domestic market or the external market, the market is now in the "three overcast" adverse pattern from the technical indicators. After the short term negative impact, the gap between the two countries is becoming more and more serious.

But in the end, the long-term trend of domestic and foreign cotton market will return to the fundamentals, and the recovery will still be possible.