Arabica rose 300 points to settle 92.90 in one way trading with nary a downtick after the Western side of the Atlantic got down to business. The European session was a slow and steady grind lower, succumbing to 140 points of weakness at the bottom shortly after the traditional NY open. A spicy Somar headline gathered interest around 8am, yet reaction was limited; initial response was a metaphorical shoulder shrug. Trade sellers rushed in on the short side, yet the markets ascent had already quietly begun. A second day of heavy Brazilian Central Bank intervention supported the BRL as it fell out to 3.11, and from there it was difficult to determine how much of the KC x BRL performance was causation vs correlation. It appeared that short spec covering was at play as prices traded through the 26dma, though even that leaves something to be desired as an explanation. Today was the first time KC closed above the UBB since January 25th, and the first time above the 100dma in BRL terms since Nov 30th, albeit with a rollover boost. Opening selling was more dramatic on the London side of the equation, digging a deeper hole to climb out of. Prices ultimately closed 1364, +30 in perfect harmony with KC from the 8am magic hour on. The arb rose from 28.65 to 31 on the day.
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