US August CPI +8.3% y/y vs +8.1% expected

• Prior was +8.5%
• +0.1% m/m vs -0.1% expected and 0.0% prior

Core CPI:

• 6.3% y/y vs 6.1% expected and 5.9% prior
• 0.6% m/m vs +0.3% expected and +0.3% prior

Details:

• CPI energy -5.0% vs -4.6% prior
• Gasoline -10.6% m/m vs -7.7% prior
• New vehicles +0.8% vs +0.6% prior
• Used vehicles -0.1% vs -0.4% m/m prior
• Owners' equivalent rent +0.7% m/m vs +0.6% prior
• Food +0.8% vs +1.1% prior
• Real weekly earnings Earnings A company’s earnings represent its profits or net benefits as a result of its operation.Earnings are the net benefits of a corporation's operation. Earnings can be calculated as EBIT, i.e. earnings before interest and taxes, and EBITDA, i.e. earnings before interest, taxes, depreciation, and amortization.Earnings are valuable tools for investors of company shares as they can often highlight a company’s financial standing and performance. Better performances can result in strengthened share price A company’s earnings represent its profits or net benefits as a result of its operation.Earnings are the net benefits of a corporation's operation. Earnings can be calculated as EBIT, i.e. earnings before interest and taxes, and EBITDA, i.e. earnings before interest, taxes, depreciation, and amortization.Earnings are valuable tools for investors of company shares as they can often highlight a company’s financial standing and performance. Better performances can result in strengthened share price Read this Term -0.1% vs +0.5% m/m prior
• Full release

This is a potential game-changer in the dollar trade and it has surged higher across the board. USD/JPY shot to 143.40 from 142.00 ahead of the data. In a sign of how fast money was positioned, USD/JPY fell to new lows just before the data. The moves elsewhere are in the 50 to 100 pip range.

Looking at Fed fund futures, it looks like 100 bps next week is now on the table. The implied odds of 100 bps are up to 23% from zero before the data.

The terminal rate is showing 4.20% in March now from about 4.00% beforehand.

Over in the stock market, S&P 500 futures are now down 57 points. In bonds, US 2-year yields are up 12 bps to 3.69%, which is a new cycle high.

Digging deeper into the report, the gasoline fall was widely expected but that was counteracted somewhat by a 1.5% m/m increase in electricity and 3.5% m/m rise in natural gas prices. New vehicle pricing was also a problem, rising another 0.8% to add to the 10.1% y/y decline.