Arabica took advantage of a favorable set up to close +105 at 107.75. Chinese central bank support set a constructive early morning tone for the market as the dollar came under pressure, and a modest jobs number added fuel to the fire as a disappointing July print was muted by a strong revision higher for May. For much of the day currencies set the tone, and trading was something close to tick to tick. That said, statement trades did not materialize in the outrights, and midmorning resistance was momentarily removed allowing a sharp move higher on around 400 lots of outright volume. Brazil was a noted seller into strength, exhibiting a short term need to clean up the books, while also admitting to a bit of Stockholm syndrome in conversation. Industry continues to be an impressive buyer, adding cover down the curve with managed money aiding in the cause as the open interest explosion is considered by many as untenable. Robusta (1662, +18) saw good call interest, but the day – like many in London – was mostly about the structure. U/X regained steam closing at 20 over, +9 on the day, with nearly 6k lots trading. CSOs indicated caution with excellent volume in U/X options. The COT indicated little of interest as net position changes were minimal. The chunky gross moves in the commercial contingent – to nearly no net result – are most likely a result of spreads.
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