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Wednesday, May 25, 2022

Tokyo rubber futures edge lower after downturn in oil prices

TOKYO, Feb 17 (Reuters) – Benchmark TOCOM rubber futures edged lower on Wednesday, erasing gains from early this week, as investors took profit following a downturn in oil prices after hopes for an agreement among top producers to freeze output faded.

FUNDAMENTALS

The Tokyo Commodity Exchange rubber contract for July delivery JRUc6 0#2JRU: was down 0.4 yen, or 0.3 percent, at 153.6 yen ($1.34) per kg as of 0031 GMT, after touching a fresh 1-week high the previous day. RUB/T

Top oil exporters Russia and Saudi Arabia agreed on Tuesday to freeze output levels but said the deal was contingent on other producers joining in – a major sticking point with Iran absent from the talks and determined to raise production.

European car sales rose 6.3 percent to 1,093,565 vehicles in January, industry data showed on Tuesday, even as Europe’s largest carmaker Volkswagen (VLKPF) saw registrations of VW-branded cars fall 4 percent in the wake of a diesel emissions scandal.

China’s General Administration of Customs released preliminary trade data for January on Monday.

The current El Nino weather pattern is easing, with weather models indicating that La Nina conditions could emerge in the coming months for the first time in four years, climate experts say.

MARKET NEWS

Brent oil fell almost 4 percent on Tuesday, erasing earlygains after top producers Russia and Saudi Arabia dashed expectations of an outright supply cut by agreeing only to freeze output if other big exporters joined them.

The yen retook some ground against the dollar on Wednesday as a recent rebound in crude oil prices fizzled and revived demand for the safe-haven Japanese currency. The dollar fetched 114.09 yen JPY= , having pulled back from a one-week high of 114.875 reached overnight. FRX/

Japan’s benchmark Nikkei stock average (XC0009692440) was up 0.4 percent in Wednesday trade after global equity markets rallied the previous day as investors engaged in bargain hunting. MKTS/GLOB

DATA/EVENTS (GMT)

The following data is expected on Wednesday: (Time in GMT)

1330 U.S. Housing starts Jan

1330 U.S. Building permits Jan

1415 U.S. Industrial output Jan

1800 Minutes of Federal Reserve’s Jan.

26-27 meeting ($1 = 114.2200 yen)
(Reporting by Yuka Obayashi; Editing by Michael Perry)

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