Oct’22 jumped up above 18c this morning and aside from a brief print back to 17.98 maintained this positivity through the first few hours, matching the wider macro which was having its best day for a while. The calm morning trading acted as a prelude to some more vigorous activity as the Americas morning drew in some increased spec volumes (both new buying and short covering) which set the market more sharply upward to the 18.40 area. While there was no fundamental reason for the change of direction the macro combined with a sense of relief from remaining longs enabled the momentum to be maintained and prompting a further push to 18.59 and provide the highest intra-day gains for some time. Nearby spreads were benefitting from this spec activity with Oct’22/March’23 back up to -0.14 points and March/May’23 to 0.67 points, while overhead there was limited resistance as a return to 5.34 for the USDBRL offset the market rise and limited producer participation. The final couple of hours saw movement within the upper part of the range as profits were taken before buyers returned to ensure a positive close, and settlement for Oct’22 at 18.52 provides a platform from which further near-term gains are potentially attainable should the macro recovery be maintained.
