By Muhammad Fadzil Abd. Rahman & Wuttipun Supina
A. THE MOVEMENTS OF GLOBAL STOCKS, CURRENCIES AND ENERGY
i. Global Stock Market
The Dow Jones closed higher at 16,321.71 points on Friday 28 February as compared to 16,207.14 points on Monday 24 February supported by the comments from Janet Yellen, the Chairwoman of Fed on the possibility for Fed to weigh a tapering pause if U.S. economic weakness persists as well as strong reports on the U.S. positive sales figure of new home and durable goods in January 2014.
The European stock rose to a six-year high on Tuesday and hovered at 338 level this week supported by a continued improvement on Eurozone economic sentiment in February as well as rising German retail sales at the strongest pace in seven years in January 2014.
The Japanese stocks rose to a four-week high on Tuesday boosted by strong U.S.economic reports. However, the Japanese stocks fell throughout the week weighed by the news on heightened tension in Ukraine and the strengthening of yen.
China’s Shanghai Composite Index fell during Monday to Tuesday after the news that Chinese banks began tightening loans to developers and the PBOC drained some liquidity through open-market operation. These reports raised investors concern over theChina financial market and will affected Chinese economic growth. However, the China’s Shanghai Composite Index rebounded for the rest of the week.
ii. Currencies : Foreign Exchange
The dollar weakened against euro and Japanese yen influenced by the statements by Fed on the possibility of tapering pause. The Chinese yuan and Thai baht weakened against the dollar, whereas Malaysian ringgit and Indonesian rupiah strengthened.
iii. Energy : Crude Oil Prices
The Crude Oil futures on Nymex moved in a downward trend during the week and hovered at USD102 a barrel weighted by the report on continued rising of U.S. crude oil stockpiles and weaker oil demand as winter comes to an end.
B. RUBBER MARKETS
Asian natural rubber (NR) prices fell on Monday and Tuesday following the news that Chinese banks stopped giving loan to property developers. This report had stoking fears over the demand outlook for industrial commodity including rubber. Nevertheless, rubber prices rebounded for the rest of the week supported by firm rubber futures markets on Tocom and SHFE as traders reassessed rubber fundamentals. Currently NR is in low production period due to wintering season in major producing countries.
During the week, IRCo’s DCP fell 4.78 US cents/kg, or 2.38% to 196.18 US cents/kg on Friday 28 February 2014 from 200.96 US cents/kg on the previous Friday.
The physical and futures prices are shown in the table below :-
|
Description |
28-Feb-14 |
21-Feb-14 |
Change |
Unit |
|
IRCo’s DCP |
196.18 |
200.96 |
-4.78 |
US cents/kg |
|
TOCOM/RSS3 * |
|
|
|
|
|
– Mar 14 |
222.00 |
218.80 |
3.20 |
Yen/kg |
|
– Aug 14 |
225.00 |
226.90 |
-1.90 |
Yen/kg |
|
– Volume |
24,039.00 |
7,125.00 |
16,914.00 |
Lots |
|
SHFE/RSS3 ** |
15,040.00 |
15,585.00 |
-545.00 |
Yuan/ton |
|
AFET/RSS3 |
|
|
|
|
|
– Mar 14 |
71.50 |
70.00 |
1.50 |
THB/kg |
|
– Sep 14 |
72.10 |
72.00 |
0.10 |
THB/kg |
|
– Volume |
208.00 |
88.00 |
120.00 |
Lots |
|
SMR20 *** |
196.00 |
199.00 |
-3.00 |
US cents/kg |
|
SIR20 *** |
187.00 |
190.00 |
-3.00 |
US cents/kg |
|
RRIT |
|
|
|
|
|
– RSS3 |
70.55 |
71.30 |
-0.75 |
THB/kg |
|
– STR20 |
60.80 |
62.55 |
-1.75 |
THB/kg |
|
– USS3 |
63.17 |
63.49 |
-0.32 |
THB/kg |
|
– Conc. Latex |
47.10 |
48.10 |
-1.00 |
THB/kg |
|
– Field Latex |
62.00 |
65.00 |
-3.00 |
THB/kg |
|
Notes: * the day sessions |
||||
|
** the most active month is Sep 14 |
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|
*** offers, fob prices for Mar/Apr 14 deliveries |
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The analysis in IRCo’s technical MACD and Signal Line indicated that the current NR prices remained volatile and stayed in a downward trend mainly dampened by weak market sentiment and low investor’s confidence.
Nonetheless, it is expected that the dry wintering season and the impact of El Nino in the producing region will reduce NR supply in the coming weeks. Hence, it is likely that the rubber market fundamentals will bring positive influence to the currently weak market sentiment, and there is a high probability for NR prices in physical rubber mSource: arkets to improve.
Source: IRCo
