1. TOCOM NR futures edged lower, but in a limited range on last Friday’s session owing to profit booking in the market, while market remained closed on Monday. Meanwhile, NR prices at SICOM witnessed decline on Monday amid persisting concerns of supply growth.
2. US automobile sales witnessed strong growth in September, despite the adverse impact of Hurricanes Irma and Harvey, indicating recovery in auto sector growth trend. Total vehicle sales during Sep’17 increased to 1.55 million units, about 6.1% higher compared to 1.46 million units in the same month last year.
3. At the European front, vehicle sales growth has continued the growth momentum supported by low interest rates, improving economic activity, inflation resulting in increasing of spending. Total vehicle sales during Jan to Sep period are seen increasing from 13.07 million units in 2016 to 13.75 million units in 2017, recording a growth of 5.2% YoY.
4. Japanese port stocks have declined to 5781 tons by 20th Sep from 6216 tons, ten days earlier, falling to two month lows indicating the improving demand in the region.
Japan’s auto sector growth continues to grow at a strong rate supported by improving economic activity in the country. Total sales during Jan – Sep period are estimated to have increased by 8.1% YoY to 4.08 million units compared to 3.77 million units during same period last year.
5. Moving forward, strong consumption growth expected in the coming quarter supported by improving auto sector growth along with manufacturing activity acceleration should remain support NR prices in the medium term.
6. Vietnam NR exports during Aug’17 have increased by 14.2% YoY to 171.62 thousand tons compared to 150.25 thousand tons during same month last year and 13.6% higher compared to 151.14 thousand tons during July 2017. Further, in September NR exports from Vietnam are estimated to increase to 172.5 thousand tons, a rise to the tune of 14.4% compared to same month last year. Exponential growth in Vietnam’s exports along with Thailand and Indonesia is expected add to supply growth concerns in the coming week.
7. At the economic front, US nonfarm payrolls declined by 33 thousand during Sep’17 from previous month while the job growth in August was revised higher to 169 thousand from 156 thousand. Further, US unemployment rate declined to 4.2%, lowest level since Feb 2001, and average hourly earnings increased by 2.9% YoY indicating the improvement in labor sector despite decline in jobs numbers which has been majorly attributed to adverse impact of hurricanes Harvey and Irma.
8. Further, US President Donald Trump’s new proposed tax plan and hawkish remarks from FED Chair Person Janet Yellen during a speech given are also expected to remain supportive to December rate hike expectations, which is expected to keep the Dollar on a firm note against Yen and support NR prices in Tokyo market in the near term
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