*SHFE Jan 2023: Closed 0.7% down *SICOM TSR20 Dec 2021: Down 0.5% at 3.07 PM

Natural rubber futures contracts (Jan 2023 expiration) closed today’s (Sep 19, Monday) daytime trading on the Shanghai Futures Exchange at 12,885 yuan (Down 100 yuan or 0.7%) and the prices settled at 12,955 yuan (Down 30 yuan or 0.2%). The following chart shows today’s price chart.

On the SGX SICOM Exchange, TSR20 contracts (Dec 2022 expiration) were traded at US$ 131.40 (Down 0.7 dollar or 0.5%) at 3.07 PM today (Sep 19).

A further scaling back of COVID lockdowns in China’s megacity Chengdu from today (Sept 19) is expected to boost economic activity, particularly the transport sector which is the key end-use sector for natural rubber. The influence of this positive factor on rubber futures is seen offset by the concern over a jumbo rate hike and policy tightening by the U.S. Federal Reserve in its two-day FOMC meeting to be concluded on this Wednesday (Sept 21). While the dollar is continuing along a gaining trajectory, investors in risky asset classes, including natural rubber futures, are largely moving cautiously and staying on the side-lines.

The meetings of the Bank of England and Swiss National Bank, to be held on this Thursday (Sept 22), are expected to make major hikes in their policy interest rates to curb the soaring inflation largely driven by energy crisis. The resultant tightening of financial markets will have considerable negative bearing on the economic growth of the respective countries.

Investment sentiment in commodities and equities is also influenced by the concern over the PMI data for the euro zone region and the U.K., for August, which are scheduled to be released on this Thursday (Sept 22). It is widely expected that the PMI reading will stay below 50-level by reflecting a contraction of economic activities.

Today (Sept 19) being a holiday, there is no trading on the JPX Osaka Exchange. A meeting of the Bank of Japan (BoJ), scheduled for Sept 22, is expected to consider intervention in the foreign exchange market to support the weak yen. The yen has hit a 24-year low against the dollar in the beginning of Sept. If the yen gains strength on potential intervention by the BoJ, it can weigh on the RSS3 futures traded on the JPX Osaka exchange in the subsequent days.

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