JAPAN: "JAPAN FINANCE MINISTER KATAYAMA: TRUMP EXPRESSED CONCERNS ABOUT [...]

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.

The AUD went into the CPI print trading around 0.7160, -0.04% and the SPI was trading around 9160.0, +0.50%. “AUSTRALIA JULY CONSUMER PRICES RISE 1.0% M/M; EST. 0.9%, AUSTRALIA JULY TRIMMED MEAN CPI RISES 3.6% Y/Y; EST. 3.5%, AUSTRALIA JULY TRIMMED MEAN CPI RISES 0.5% M/M” - BBG. The AUD has moved a few spreads higher in reaction to this.

• {AUDUSD Curncy} - 0.7170, +0.11%
• {AUDNZD Curncy} - 1.2015, +0.25%
• {AUDJPY Curncy} - 114.12, +0.10%
• {XPA Index} - 9145, +0.34%
• 2027 OIS +3, YM -2.5 bps, XM -2.5 bps