Recently, Zheng cotton futures prices have once again shown a tendency to stabilize and fluctuate after bottoming out. This may be related to the recovery of market mentality after last week’s sharp price drop, or may be due to the recent game of long and short factors in the market.
The U.S. Labor Department reported last Friday that nonfarm job creation in November was lower than expected. The market expected 550,000 new nonfarm jobs to be added, but the reported increase was only 210,000. As concerns about U.S. inflation in domestic and foreign markets have not improved significantly in the early stage, both financial markets and commodity markets are nervous about data reports related to the U.S. economy. At the same time, market expectations that the United States will cancel the high tariffs imposed on China have also increased.
In addition, according to relevant media reports on December 3, China will continue to implement a prudent monetary policy, maintain reasonable and sufficient liquidity, formulate policies based on the needs of market entities, lower reserve requirements in a timely manner, and increase support for the real economy, especially small, medium and micro enterprises. , to ensure the stable and healthy operation of the economy. Although there is a lot of bullish and bearish news in the macro market, all parties in the market have adopted a wait-and-see attitude in the absence of clear guidance.
At present, the contradiction between high cost and low demand in the cotton market fundamentals is still prominent. Especially after experiencing this round of “washing up” at the beginning of the month, the downstream textile market is even more worried about the winter mutated virus exacerbating consumption pressure, especially the current accumulation of gauze product inventories. Textile companies are facing challenges in commodity flow and capital flow. The downstream market has insufficient confidence and cotton procurement It is difficult to have strong purchasing power, which will also bring resistance to market recovery.
According to a recent announcement from the Zhengzhou Commodity Exchange, starting from the settlement on December 8, 2021, the trading margin standard for the cotton futures 2201 contract will be adjusted to 15%. Starting from the settlement on December 13, 2021, the trading margin standard of the cotton futures 2201 contract will be adjusted to 20%. It is expected that as the margin ratio increases, market speculation will be curbed to a certain extent and will also play a certain stabilizing role in the cotton market.
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