Key TOCOM rubber futures jumped to a six-week high on Friday (Jul 19), buoyed by a buying spree prompted by a weaker yen and higher oil prices, after the Federal Reserve again reassured investors that it was flexible on the timing for ending its stimulus program.
FUNDAMENTALS
The key Tokyo Commodity Exchange rubber contract for December delivery was trading up 4.36 percent at 258.4 yen as of 0039 GMT. The benchmark contract climbed as high as 262.0 in early trade, the highest since June 5.
New claims for U.S. jobless benefits fell last week and factory activity picked up in the Mid-Atlantic region in early July, signs of a stronger economy that could help push the Federal Reserve to ease its monetary stimulus.
Moody’s Investors Service on Thursday (Jul 18) raised the U.S. sovereign outlook to stable from negative and affirmed the country’s triple-A rating, citing steady growth despite reduced government spending.
The world’s economic crisis response team will grapple with the prospect of more market volatility on Friday (Jul 19) as finance ministers and central bankers gather in Moscow to chart a course towards recovery.
Funds betting on commodity price moves have lost money every month since January, their joint longest losing streak on record, raising more doubts about their ability to make money at a time when the commodity “supercycle” may be over.
MARKET NEWS
The Dow and the S&P 500 closed at record highs on Thursday (Jul 18) after Morgan Stanley and others reported better-than-expected earnings and Federal Reserve Chairman Ben Bernanke’s comments further reassured markets.
Japan’s Nikkei share average opened higher on Friday (Jul 19), helped by gains on Wall Street and a weakening yen, while expectations of a ruling party victory in this weekend’s upper house election are supporting sentiment.
The U.S. dollar was again probing major resistance against the yen on Friday (Jul 19), encouraged by solid economic data, higher Treasury yields and an unthreatening conclusion to testimony from Federal Reserve chief Ben Bernanke.
U.S. crude oil hit its highest level in 16 months on Thursday (Jul 18), rising above $108 a barrel on signs of a stronger U.S. economy and shrinking its discount to North Sea Brent to the narrowest in almost three years.
Reuters, July 19, 2013
