JAPAN: "JAPAN FINANCE MINISTER KATAYAMA: BOJ'S LATEST RATE HIKE (NOT [...]

ACGBs (YM -3.0 & XM -1.5) are 5-6bps cheaper after today’s higher-then-expected July CPI print.

• MNI Techs (YMU6): A medium-term uptrend in Aussie 3-yr futures since Mar 23 remains intact and the pullback between Jun 25 - Jul 24 still appears to be a correction. A resumption of weakness would suggest scope for a move towards 95.195, the Apr 29 and 30 low on the continuation chart. The key medium-term support lies at 95.035 (cont), the Mar 23 low. Key resistance and the bull trigger is 95.670, the Jun 25 and 29 high.
• July trimmed mean inflation held at 3.6% y/y, 0.1pp above consensus and well above the top of the RBA's band. Headline was also stronger than forecast rising 1.0% m/m & 3.5% y/y after June's -0.1% & 3.8%.
• Cash US tsys are ~1bp cheaper in today’s Asia-Pac session after yesterday’s US/Iran peace deal-induced gains.
• Cash ACGBs are 1-2bps cheaper, after being 3-4bps richer earlier today, with the AU-US 10-year yield differential at +39bps.
• The bills strip has bear-steepened, with pricing -6 to -3 across contracts.
• RBA-dated OIS pricing is 3-6bps firmer after today’s CPI data, showing tightening across all meetings, with the probability of a 25bp hike rising from 30% for September to 88% by December 2026. 

Bloomberg Finance LP

The AUD has bounced as July CPI printed above expectations, therefore bringing a hike potentially back to the table. The AUD is outperforming across the board and is adding to its already mounting tailwinds from a particularly soft US dollar. We have US GDP/PCE tonight and Jackson Hole to come. I suspect the AUD/USD might find the going tough as it approaches 0.7200 ahead of those events. I suspect the crosses might be a better way to express that view until they are out of the way.

• {AUDUSD Curncy} - 0.7175,+0.18%
• {NZDUSD Curncy} - 0.5963, -0.22%
• {AUDNZD Curncy} -  1.234, +0.42%

July trimmed mean inflation held at 3.6% y/y, 0.1pp above consensus and well above the top of the RBA’s band. Headline was also stronger than forecast rising 1.0% m/m & 3.5% y/y after June’s -0.1% & 3.8%. See press release here. More details to follow.