AUD/USD is off its earlier highs following the mixed Q2 CPI report. The pair has lost a little over 25pips to be back around 0.6925. Recent outperformance against key crosses has also been unwound to a degree. AUD/JPY is back sub 95.00, while AUD/NZD is back close to 1.1100, from 1.1140 earlier.
- The headline CPI miss (1.8% QoQ, versus 1.9% expected) and 6.1% YoY (6.3% expected), coupled with a slight downside miss on the weighted median likely rules out anything more than a 50bps hike from the RBA next week.
- There was a slight upward revision to the trimmed mean though, which is now running at 4.9% yoy, versus 4.7% expected.
- AU yields are lower, off by 9bps for the 2yr. The AU-US 2yr spread is back beyond -41bps, versus recent highs around -30bps.