Over $4 Billion Removed

Mobius Intel Brief:

Reflecting on July-Aug. carry unwind: Leveraged fund managers cut net short interest in the Japanese yen by more than $4 billion in the seven days ending August 6 as the carry unwind feedback loop accelerated appreciation against the dollar.

Day 1 of Inflation Data Week: While labor market data surpassed inflation as the Fed’s primary rate cut indicator, this week’s PPI (today) and CPI (tomorrow) data plays a central role in directing 1) rate cut frequency, 2) rate cut magnitude, and 3) market recession sentiment. Meanwhile, Japan’s weak currency and accelerating PPI inflation create a material problem for Bank of Japan (BOJ) officials, who downplayed rate hike plans to stabilize market volatility last week.

On This Intel Brief

• Over $4 Billion Removed

• The BOJ’s Currency/Inflation Problem

• Underlying Trends in July’s U.S. PPI

• Goldilocks CPI Scenario

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