IRCo's WEEKLY MARKET SNAPSHOT: 28 March - 1 April 2011

 

IRCo's DCP fell on Monday from the previous Friday before it would rebound and stayed at 524.48 US cents/kg on Friday in the wake of a tug-of-war between choppy rubber futures and steady cash markets in the region during the week.

Nevertheless, Tokyo and Shanghai rubber futures settled higher on Friday than an earlier Friday on the back of the following factors - heavy flooding in southern Thailand, a weak yen against the greenback, fresh upbeat U.S. economic data, rising oil prices, and persistent positive market sentiment.

Meanwhile, a decline in the unemployment rate of 8.8%, a rise in payrolls of 216,000 new workers in March, and satisfactory stress tests on Irish banks brought back investor confidence and global stock markets worldwide. However, investors in general still worry about leakage of radioactive water found in the Japanese sea that could lock Nikkei gains in the coming weeks and weaken exported food.

On the forex front, the greenback strengthened against the Japanese yen due to fresh upbeat data on the U.S. economy and a persistent cloud of Japanese economy, while the single currency continued to hold its own against the greenback amid continued expectations for a rate increase from the European Central Bank at its forthcoming policy meeting. Besides, the Indonesian rupiah hit a 4-year high on Friday after its central bank decided to allow the currency to appreciate so as to control inflation in the country.

Lastly, there was a report by Societe Generale SA on Wednesday saying that hedge funds have turned positive on Japanese stocks for the first time since last November after betting heavily against them following the earthquake. It added that hedge funds shifted to a net long exposure to the Nikkei over the week of 14 March. In addition, the figures of net short sellers of Nikkei futures by hedge funds accounted for US$330 million on 1 March, and they turned to a net long position valued at US$464 million on 22 March. Bank of Merrill Lynch also said recently that Japan-focused hedge funds were up 2.94% in March.

(Source: http://www.irco.biz/MarketWise.php?PHPSESSID=ff33df7494ad68cabf820249083ef6b1)