IRCo's WEEKLY MARKET SNAPSHOT 15 - 19 November 2010

IRCo's DCP stayed at 435.80 US cents/kg and continued to pull up its 14-day moving average further on Friday. At the same time, cash rubber prices in Thailand, Indonesia and Malaysia also moved in tandem with IRCo's DCP despite there were some hesitations on rubber futures concerning additional Chinese monetary tightening policies to tame inflation in the country whether they would increase cost of borrowing or not. However, rubber futures were mostly weighed on market fundamentals more than technical charts and external factors during the week.

Global stock and financial markets felt some kind of relief after the Irish government agreed to apply for an aid package from the European Union and the International Monetary Fund, and the People's Bank of China gave a clear word on Friday that it decided to raise additional 0.5 percentage points of money that banks must keep in the reserve requirement ratio from 29 November 2010 onwards in order to tame a two-year high of 4.4% inflation in October 2010. Additionally, Thai baht, Indonesian rupiah and Malaysian ringgit still extended their strength against the greenback on Friday while crude oil futures slid further.

U.S. Federal Reserve Ben Bernanke's remarks on Friday in Frankfurt showed his resolve to continue the U.S. Federal Reserve (Fed)'s second round of quantitative easing and indicated that the Fed wanted to depreciate the greenback further so as to increase export competitiveness. At the same time, the Fed also wanted to keep interest rates as low as possible in order to pull out the U.S. economy from stagnation and deflation. On Thursday, the New York Federal Reserve bought US$7.23 billion in Treasury notes while Treasurys fell as an upbeat U.S. manufacturing report and hopes of a bailout for debt-ridden Ireland cut haven buying, according to WSJ on Friday.

(Source: http://www.irco.biz/MarketWise.php?PHPSESSID=9c6633fdd55aad8cbb985caba3337f32)