Sugar:

Raw sugar futures have chopped over a 105-point range in the last month. Brazil has continued to reduce sugar output with little effect as oversupply remains an issue for the global market, thanks in large to excess Thai and centrals sugar. Despite a lack of an impact on trade flows, the reduced sugar output in Brazil has stemmed the free fall of sugar prices, which have moved with the ebbs and flows of speculative positioning. The Indian government announced that it will extend the buffer stock to 4mmt, from the previous 3mmt this year, and is expected to make a formal announcement on its 19/20 export policy this month. Many believe incentives will be centred around assisting farmers again, however, how much assistance will be provided is yet to be decided. Looking ahead, the fundamental space will be key in the next moves for sugar. 19/20 crop estimates and the announcement on India’s export policy will be of particular interest.

AUD:

The AUD has been a runaway train over the past month, trading from a mid-July USD 0.7082 high to 10-year lows in the last week at USD 0.6677. Trade tensions between the US and China continuing to dominate market sentiment as US President Trump venting his frustrations about delayed negotiations through a further 10 per cent tariff on Chinese goods. A busy week on the economic data calendar as the market looks for further policy easing justification in the local employment numbers on Thursday. The RBA has made it clear that underperformance in the labour market will be the determining factor for further rate cuts. The daily Chinese yuan fix surprised financial markets last week, setting below the key level of 7, with US officials quickly calling out China for currency manipulation. Shrugging off criticisms, the daily fix will be in focus in the near term as concerns Chinese authorities may or may not look to weaponise the currency.