Thursday, August 2, 2012

ECB disappoints the market


Key TOCOM rubber futures slipped on Thursday as disappointment that the European Central Bank (ECB) did not offer more immediate steps to boost economic growth. The ECB left its benchmark interest rate unchanged and ECB President Mario Draghi largely repeated previous bank policy at his monthly news conference, leaving open the possibility of future action.

U.S ISM’s Production Index registered 51.3% in July, which is an increase of 0.3% point over 51% reported in June 2012. This indicates growth for the 38th consecutive month. Plastics & Rubber industry is one of the four industries reporting growth in production during the month of July.

U.S auto sales rose a lower than expected 9% in July as high U.S unemployment and weak consumer confidence kept would-be buyers on the sidelines. Tyre grades from Southeast Asia were traded at their weakest in at least four years as Tokyo futures dropped, but top consumer China could buy more cargoes to exploit the low prices. The key Tokyo Commodity Exchange rubber contract for January delivery closed at ¥231 per kg. The benchmark contract fell to as low as ¥227.9 and on Friday one can expect to see a price of ¥226 a kg.

Markets on Friday will focus on the key U.S July nonfarm payrolls report, expected to show only a modest improvement in hiring from June's moderate employment growth.

Read lot more in Rubber4U – 15th August 2012 issue

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