A weaker yen boosted Tokyo rubber futures, while the news on China’s strong exports and a fall of inflation in November lent support to Shanghai rubber futures during the week even though investors worried that the U.S. Federal Reserve (Fed) might start a small cut in its stimulus program after its policy meeting on 17 – 18 December 2013 as the U.S. unemployment rate fell to 7.0% in November from 7.3% in October, and the GDP growth rate in 3Q13 was revised up to 3.6%. At the same time, physical rubber prices in Asia moved in tandem with the two bellwether rubber futures.
Furthermore, rubber fundamentals showed some improvements. Auto sales in Chinaincreased 14.12% to 2.04 million units while auto sales in the U.S. increased 8.9% to 1.25 million units in November. Heavy rain in southern Thailand reduced rubber supply in the country during the week. Additionally, IRCo’s technical charts also improved later in the week.
It is expected that rubber prices in the coming week will be mainly influenced by a move of the yen, the outcome of the Fed meeting on 17 – 18 December 2013, market sentiment and investor confidence.
Source: IRCo
