Global Joint Efforts To Fight Epidemic Prevention ICE Cotton Futures Trend "Late Spring Cold"

In March 2nd, the ICE disk finally rebounded substantially after "five consecutive Yin", and the panic of multi fund and cotton traders had subsided. According to CFTC statistics, since the end of February, the net prime rate of ICE cotton fund has declined from 15.12% to 11.31%, and has stabilized and rebounded.

Some institutions and cotton companies believe that there are three main factors leading to the rebound of ICE: first, the US financial, stock and commodity futures markets are turning. By the March Federal Reserve's interest rate cut is expected to increase significantly, the new crown pneumonia epidemic has not rapidly spread to the United States and other favorable support, the dollar index fell sharply triggered a rise in commodities; two, in the face of fierce new crown disease, the world's joint prevention and control measures, coupled with the accelerated development of vaccine research, market confidence bottomed out; three was ICE down 65 cents / pound, 62 cents / pound. The promotion of global buyers signed a large number of contracts for the purchase of 2019/20 and 2020/21 cotton, and US cotton exports are expected to increase sharply (ON-CALL points are not low).

Does this mean that ICE has continued to rebound or even reverse its rhythm? The industry believes that the main contract back to 65 cents / pound or even 68 cents / pound of the strong expectations, but at any time to guard against the cotton futures "spring cold" market, ICE disk volatility is still large, the overall oscillation rebound trend is established, or need time to change space.

First, the outbreak of the new crown disease broke out worldwide. Following South Korea, Japan, Italy and Iran, the situation of prevention and control in Europe has become increasingly severe.

Second, the central bank's interest in releasing liquidity to stimulate the economy through the interest rate cuts is expected and is being digested by the market ahead of time.

Third, under the impact of the new crown epidemic, the global and Chinese economic recovery is facing great pressure. According to the National Bureau of statistics, in February 2020, China's Manufacturing Purchasing Managers Index (PMI) was 35.7%, down 14.3 percentage points from last month, and the non manufacturing business activity index was 29.6%, down 24.5 percentage points from last month, indicating that enterprises' confidence in the future activities of production and operation shows that the confidence of the economic activities is still weak, while in the same period, India PMI also declined slightly from 55.3 in January. Up to 54.5.