July's inflation statistics have mostly hit the ground with the release of successive CPI and PPI readings, and most of the concern over inflation is because of the need for the Fed to raise rates at the top of inflation, as the economists expect. So the macro changes for now are all about the sentiment, but in fact it's still up to the Fed to do it, if it keeps tightening up.
It does not matter whether inflation has peaked, because it is "policy," not sentiment, that can really change the macro picture. After the release of the CPI, there has already been a fairly dense series of statements from the Fed's FOMC Committee, which are almost always biased toward the dovish right now. In particular, this morning's Fed Daley's remarks on raising interest rates and the Fed Funds rate remained relatively dovish, starting with his view that a 50 basis point increase in September makes sense. This has helped to stabilize the labor market, especially as last night's jobless claims rose from the previous month. But as we know, the Fed is no longer willing to provide forward guidance, so Daley, in backing the 50 basis points move, was not surprised to note that the numbers hinting at rate hikes are driven by inflation, which will be determined, predictably, by non-farm and mid-September CPI numbers at the end of August. Another message was to emphasize that the federal funds rate would end 2022 at 3.4% (3.5%), implying a total increase of 100 basis points this year. Therefore, judging from the current situation, before the new non-farm and CPI comes out, the current macro sentiment is still dominated by "inflation peaking, the Federal Reserve slowing down the rate increase". And when the emotional side is relatively stable, the rest is a money game, with more money coming in.
Money can be released primarily through two channels: the dollar index, which when it peaks out in anticipation and begins to decline, indicates that more investors are inclined to move toward higher-yielding assets, including precious metals, stocks, and currency markets, relative to their ability to store dollars or buy Treasuries. The DXY has also been a volatile downward trend for now, and the market is pricing in a decent performance.
The decline in the U.S. gold index will also affect Treasury bond buying sentiment. Looking at long-term buying sentiment, the 30-year Treasury yield is now gradually rising. Judging from the recent bidding results, investors are still considering whether a peak in inflation will prompt the Federal Reserve to slow down interest rate hikes, which could be the basis of a shift in risk markets toward the rally. So for the money, it's the lower-yielding but more stable Treasury.
Or choose the US stock market, which has already seen a floor in expectations and prices start to rise, but will inevitably be affected by the Fed's rate-raising policy. In fact, the current U.S. bond market is still relatively weak. Short-term U.S. bonds are still at the top of the market. Especially after the recent start of U.S. stocks, there was a large number of U.S. bond sales. In fact, the U.S. bond sell-off is a double-edged sword. Although it can release more funds, but if these funds do not enter the market. So the higher Treasury yield will continue to attract more external funds, and the capital inside the risk market is most likely to be attracted. On the contrary, if the Treasury yield can continue to be depressed, it will take up a large amount of capital, but will be less attractive to external funds. This is the place where the Treasury system is more obsessed, especially where the released capital goes.
Especially for the currency market, although the merger benefit of ETH has attracted a lot of attention and funds, but the stock capital is limited after all, if only the stock capital game, there is no benefit for the price trend. USDT's market value this week certainly shows signs of increasing, having raised about $400 million in value by the end of the week, or $400 million in exchange for USDT. But it's too early to be happy, because USDT's market value is up, but USDC's market value is still down, and the decline is consistent with USDT's increase, which is 400 million dollars less in value over the week, so the overall amount of money in the currency market is still fluctuating, which means there's at least no obvious evidence that U.S. debt has entered the currency market.
So the current currency market is still the game of stock capital, so it depends on the mood of capital investment, whether or not to maintain a high investment has become a price trend indicator. Looking at USDT, which is also the main trading force, the amount of capital transferred to the exchange is indeed increasing in a small amount. Especially after the release of the CPI and PPI data, the statement that inflation has peaked is at least valid for a short period of time, so more capital has been transferred to the exchange to participate in the bargain hunt. However, unlike USDT, representing the main U.S. capital, USDC did not step up efforts, but constantly lowered purchasing expectations. As of 8 a.m. today, the amount of capital is already the lowest in nearly half a year. This also represents that major U.S. investors have slowed their investment, which will inevitably have an impact on the market. Especially after many comparisons, it has become clear that USDT users are more active in the main trading time zone in Europe, while USDC is active in the main trading time zone in the United States. The changes in capital mean that the afternoon to evening buying of BTC and ETH in the Beijing event will be relatively strong, and in the late afternoon of the U.S. stock opening, until the morning selling will be even more violent, which needs additional attention.
In addition, from the stock exchange funds can be seen, the current USDT and USDC is relatively stable, neither a large pile up situation, and no big signs of underweight, which shows the stock exchange funds currently have no obvious attitude, the funds transferred into each day will almost become purchasing power, and not too much accumulation. This is, of course, why exchange-rate movements have been higher recently, and why arbitrage opportunities have increased.
The increase of USDT and the decrease of USDC are still difficult to judge the overall amount of money market. We can only find the breakthrough point through the sentiment of buying and selling. First, look at the BTC selling pressure and purchasing power. The data as of 8 am show selling pressure is still high, but the value transferred from the exchange is low, even does not cover the overall selling pressure. This is the phenomenon of purchasing power shortage, also shows the BTC price instability. Compared with BTC, ETH which has merger benefits still keeps a relatively strong withdrawal and withdrawal, although selling pressure is still not low, but buying sentiment continues to rise, so for the time being, if there is no sign of short, ETH will continue to maintain a volatile trend, and with the high volatility of the mood upward probability is increasing. So from the pressure and the comparison of buying, the main buying trend is still on the ETH.
In addition, we may have some unexpected data. Judging from the address profit of BTC and ETH in the last half year, although the recent month's increase of ETH is encouraging, the address profit ratio of ETH is still lower than that of BTC. There is no case that the ETH earner exceeds BTC, but only by bringing them closer together, it can be seen that ETH should have more room to rise than BTC.
And from the stock data of the exchange, because more attention is still on the merger of ETH, the advantage relative to the pressure on the purchase of ETH more intense, so the stock of the exchange ETH due to the downward trend, more chips were withdrawn from the exchange by the user off-site, and BTC with the increase in profit users, more chips moved into the exchange, ready to look for the right opportunity to exit, so the stock is increasing.
It is also important to note that the long-ago focus on Bitfinex's daily BTC spot price shows no obvious signs of selling so far, and has been for two full months, with the average price probably around $24,000, which is barely recouping its current price. ETH's cash bullish positions, which began to decline in August at around the same time, averaged around $1,600, and were largely written off when positions were closed.
Today is Friday, and judging from the overall macro situation, the willingness to buy remains relatively robust. In particular, after the dovish remarks by the officials of the Federal Reserve in the morning, the futures on the Nasdaq stock index began a rising trend in the pre-market yesterday with a high opening and a low downward movement. If this can be maintained, the U.S. stock market should open at a decent level in the evening. However, over the weekend, although it has been calm for a long time, the current mood does not support a sharp downward movement, but be prepared for all that.