AUD/USD flows: Red Hot Inflation

The Q4 CPI has surprised to the upside for Australia. More importantly, the RBA preferred trim mean CPI is showing even more hawkish surprise than headline CPI. The strong inflationary pressure will further exacerbate market participants' anticipation of an upcoming hike. On balance, we do not see an imminent hike from the RBA without a change in forward guidance first.

AUD/USD is trading 0.36% lower at 0.6987 after an initial pop on the headline.