A soft start to the week had raw sugar futures on the back foot on Monday night. India announced a 10% increase to their import duty from 40% to 50% with potential for more hikes. Whilst Petrobras, again cut gasoline prices by 2%. Despite India not actively importing sugar and Brazil at assumed maximum output, the negatively perceived information saw sugar crumble intraday. Tuesday saw the latest UNICA report for 2H June largely as expected. Initially weaker following the print, an announcement that former Brazil President Lula was convicted of corruption triggered a small rally in the BRL and sugar. Firming continued into the back end of the week where sugar erased all of Mondays losses to settle in front.
The AUD has become the performer of the week, surpassing 78 cents and forming a fresh handle. Softer than expected data in the US and dovish chatter from FOMC members driving a stronger AUD. US retail sales and CPI on Friday night missed market expectations seeing the USD tumble. Moving forward, the economic calendar looks light with the RBA July meeting minutes (Tuesday) and local unemployment due on Thursday. Local unemployment is expected weaker at 5.6%. Meanwhile, Tuesday’s RBA minutes will be monitored for any change in communications around growth and inflation.