A choppy week for raw sugar futures, prompt Mar18 rejected at attempts to break recent technical resistance at 14.40 USc/lb. Prices have remained range bound as the well-known market levers continue to offer no fresh directional change. The latest Commitment of Traders report showed specs increasing 10,500 shorts to sit net short 114,000 lots, which was somewhat unexpected given the market traded a shy 50-point range in the reporting period. However, following price action was dull – hinting we may expect the same this coming Friday. The latest UNICA report for 1H October is due later this week.
USD strength returned to the forefront last week with increased likelihood that US President Trump’s tax reform will get up. Steady gains made on positive local employment data stalled, with the AUD being shunted to the bottom end of USD 0.78. The RBA minutes saw a muted response from markets as little new information was presented. There is a quiet week ahead on the economic data calendar, we see local PPI and CPI paired with US CPI. A firming USD would expect to see the AUD under further pressure (short term) as President Trump’s tax reform agenda begins to play out.