The Rubber Market Was Jittery After The Emergence Of High Inflation In China

Shanghai and Tokyo rubber futures continued to retreat for a second consecutive day on Monday as investors and speculators unwound their long positions for profit-taking before both markets would settled mixed on Tuesday. At the same time, IRCo’s DCP and cash prices moved in tandem with the price movement on rubber futures.

It is expected that a 4.4% rise in the October inflation rate in China, a measure to control inflows of foreign money from elsewhere to China and a tighter lending policy by its central bank have signaled Chinese leaders to be wary of leading the Chinese economy into the brink of higher inflation and social violence in the country. In addition, a rise in both Ireland’s banks and its public debts may paralyze the European economy if euro zone members cannot agree on a package of aid for Ireland in time.

Furthermore, the U.S. Federal Reserve Bank of New York has started buying US$5.419 billion in Treasury bonds on Tuesday, according to a report by WSJ on 17 November 2010, this will lend support for the greenback to continue strengthening against the euro and the Japanese yen in coming days and it is one of many factors that can weaken crude oil futures and other commodity prices, including rubber futures. However, a weakening Japanese yen will raise yen-nominated prices on Tokyo rubber futures.

(Source: http://www.irco.biz/BlogMoreDetial.php?id=2711&ShowContent=news%20&PHPSESSID=734b7f0627235560d7590ba796b6afb6)