Sino US Talks Need To Be Treated Cautiously To Boost The Enthusiasm Of The Cotton Market.

Last week, leaders of the two sides exchanged talks with each other and decided to meet at the summit of the group of twenty leaders in Osaka to exchange views on the fundamental issue of the development of relations between China and the United States. Today's G20 summit has been officially opened. Speculation on the outcome of the Sino US meeting during the summit is controversial. As a result, it brings new waves to the cotton market, and the trend of future market is even more blurred and difficult to ascertain. So what should the industry do to deal with the current market?

First of all, Zheng cotton futures rebounded significantly, the main contract 1909 from the beginning of the month 13000 yuan / ton gradually picked up, recently hit 14000 yuan / ton high point, greatly boosted the enthusiasm of market participants. Compared with the previous stage, the volume and position of zhengmian daily increased slowly.

Secondly, from the national cotton storage rate, nearly two weeks turnover rate and average transaction price rose earlier than the beginning of the month. The reason is that in addition to the low price cut, bidding for competitive price increases, Sino US telephone exchanges, the release of good trade negotiations, prompting the pessimism of the industry has eased, some low inventory textile enterprises small batch replenishment phenomenon is increasing. Xinjiang cotton spot quotation rose slightly, especially in some spot price basis trading resources, followed by futures changes significantly, traders flexible operation, active sales. In addition, the price of raw polyester staple fiber is rising, viscose staple fiber has gradually stabilized, and the downstream blended yarn has improved. Market indications indicate that the purchase and sale of cotton market is slightly warmer. Does that mean that the turning point of cotton market has arrived?

A simple combing is not difficult to find that the recent improvement in market timing is mainly driven by market participants' good longing for the Sino US meeting. But what can not be ignored is the different signals from the US before the summit opens. On the one hand, an American politician said that the goal of the US meeting was to restart the Sino US negotiations and would not consider new taxes. According to the survey conducted by Merrill Lynch, 65% thought that the talks would be fruitless and would not continue to levy taxes. Therefore, from a market point of view, this meeting is difficult to achieve results, and China and the United States will continue the current stalemate. In addition, prior to Trump's departure to Japan, he told Fawkes news that if he did not make progress on the trade agreement with President Xi when he held a summit in Japan, he would impose a large amount of tariffs on China's goods exported to the US. But the tax rate may not be 25%, but 10%.

On the whole, the meeting is expected to break the Sino US stalemate, but it still seems a long way to go before we reach a final agreement. Operators can adjust their buying and selling strategies timely according to the stage rebound of the cotton market, and investors can carry out short wave band operation according to the situation, but they still need to be cautious of sudden situations. In short, we need to pay close attention to the outcome of Saturday's meeting and determine the direction of operation.