TOKYO, Feb 2 (Reuters) – Benchmark TOCOM rubber futures fell on Tuesday, giving up the previous day’s gains after weak factory data from China stoked fears over slowing demand in the top buyer of the commodity.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for July delivery JRUc6 0#2JRU: was down 1.8 yen, or 1.1 percent, at 158.2 yen ($1.31) per kg as of 0040 GMT, after ending 1 percent higher the previous day. RUB/T
China’s manufacturing activity contracted at its fastest pace in almost three-and-a-half years in January, an official survey showed, suggesting the world’s second largest economy is off to a weak start in 2016 and adding to the case for near-term stimulus.
The U.S.economy could suffer, with inflation remaining too low, if recent volatility in financial markets persists and signals a slowdown in the global economy, the Federal Reserve’s Vice Chairman Stanley Fischer said on Monday.
European Central Bank President Mario Draghi highlighted the risks facing the euro zone and reiterated the ECB was ready to review its monetary policy stance in early March.
MARKET NEWS
The dollar bought 120.85 yen JPY= , staying near a peak of 121.70 set on Friday after a shock cut in Japanese interest rates sent yen bulls packing. FRX/
Japan’s benchmark Nikkei stock average (XC0009692440) was down 0.3 percent in Tuesday trade, following a fall in U.S.and European stocks after disappointing euro zone manufacturing data dovetailed with the data from China.
U.S.crude fell for a second session in early Asian trade on Tuesday as worries about the economic health of top energy consumer China and rising oil supply weighed on markets.
DATA/EVENTS (GMT)
The following data is expected on Tuesday: (Time in GMT)
0855 Germany Unemployment rate Jan
1000 Euro zone Producer prices Dec
1000 Euro zone Unemployment rate Jan
1445 U.S. ISM-New York index Jan
($1 = 120.9500 yen)
(Reporting by Yuka Obayashi; Editing by Joseph Radford)
