Evening Coffee by Societe Generale
Dollar rose after Fed chair Janet Yellen commented about the economic outlook and the possibility of more interest-rate increases. The statements made today have increased the odds for a rate hike in the next FOMC meeting from 30 to 34 percent amongst investors. The move pushed commodity indices lower, they bounced back towards the middle of the day. Real traded to 3.0925/$.
The London market traded sideways for most of the day until the move down in Arabica uncovered a void in Robusta, which dropped to the low of the day. That move below yesterday’s low was rapidly met by speculative buying jumping into the market, once again showing interest to hold the market around the 2100 area. Volume was healthy but most of it was done via the spreads with about 9,500 executed against the front month.
New York market seemed to be moving quietly north as the Real crossed the 3.09 level, but took a turn once the currency came back to 3.10. The market eroded for the rest of the session. Speculative positions were liquidated pushing the flat price lower for the day yet it was able to come back in the last half hour to settle above yesterday’s low. With only 2 days before FND, the activity was concentrated again on the spread transactions, showing almost 13,000 lots against the March position.
KCEH7 settled -0.60 cents lower with volume estimated at 49,923 lots, including 19,281 spreads, 3,650 EFP's, 125 EFS's and 957 TAS. 2,465 calls, 1,633 puts also traded. €=$1.0574. BRL: 3.11/$. CRB: 1.9205. Crude oil 52.87. S&P500 2333.5. Open interest 177,679-3,359.
LRCH7 settled $11 lower with volume estimated at 29,543 lots, including 13,543 spreads, and 116 EFP's. 948 calls and 1,101 puts also traded. Open interest: 152,788+205.
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