10 July 2017

Weekly Market Report 10 July 2017


Following a decent retracement into the Jul17 contract expiry in the week prior, raw sugar futures have followed up with some choppy to positive price action. Bouncing around a 13.50–14 USc/lb range all week, prices surged higher on Friday night following another gasoline price cut by Petrobras. Given the instability in prices, we expect ethanol parity to have lost floor price significance. The latest Commitment of Traders report showed a reduction of 8,000 lots to 108,000 net short for specs. Despite a more technical-driven move on Friday night, the bearish fundamental backdrop makes it difficult to see more upside above 14.50 USc/lb.


A run at USD 0.77 was short-lived over the past week as the AUD slipped back toward USD 0.76 and firmed. The RBA left rates on hold and released a statement with minor dovish changes. The AUD was sold off back to a USD 0.76 handle, before testing USD 0.7571 lows. Friday saw the US Non-Farm Payrolls, highlighting a 222k increase in jobs, however USD strength was muted on softer wages growth and unemployment numbers. The beginning of the new week sees a USD 0.76 handle. Local home loans and consumer confidence with US PPI, CPI and retail sales data highlighting the economic data calendar for the week ahead.