With a shortened week owing to the US public holiday on Monday, raw sugar futures traded positively to the week end. Despite weather concerns in the US and further gasoline price hikes in Brazil, sugar positivity persisted. Damage in the wake of Hurricane Irma is yet to be evaluated, but Cuba and the Dominican Republic appear to be worst affected areas. Again, Petrobras has raised domestic gasoline prices in Brazil, given firming prices in the US. The latest Commitment of Traders report saw specs reduce their net short position by 14,000 lots (now 103,500 net short) across the short week. This week we see the latest UNICA report for 1H September. Expectations are that harvesting continues to outperform expectations.
The AUD posted fresh two-year highs this week (USD 0.81) as concerns for another rate hike by the US Fed this year shortened. FOMC members commented on an uncertain outlook for monetary policy. Price action was highlighted by another North Korean nuclear bomb test – their biggest yet – with currency safe havens rallying. As expected, the RBA left interest rates on hold, maintaining comfort with the current view on policy. A mixed bag of economic drivers this week, as we see local consumer confidence and employment data paired with US PPI, CPI and retail sales data in the US and China.