A choppy week for raw sugar futures, with prices tracking higher before settling into lower territory. The EU joined the global sugar market last week, seeing a positive reaction in white premiums and London whites contracts. Ethanol parity remains solid above current market levels, so we expect yields to slip somewhat for sugar. Despite wet weather in Brazil this week, potential drought could cause some concern. An extended monsoon season in India moves to hamper the beginning of the harvest for some areas. This week we also see the latest UNICA report for 2H September.
The USD is continuing to garner strength as the likelihood of a December rate hike increases. The AUD was naturally weaker, printing fresh three-month lows at USD 0.7733. Stronger-than-expected trade data did little to aid a soft local retail sales print, and was a catalyst to a weak end of the week for the dollar. The RBA left rates on hold – as expected – with little change in the way of commentary. Looking ahead this week, we see local consumer confidence and home loans data highlighting the domestic calendar whilst the FOMC meeting minutes, US PPI, CPI, retail sales are the highlights of global calendars.