Tonight, the July CPI data will be announced. At this moment, the global financial market is in a delicate balance - the US dollar index slightly rose to 98.46, US bond yields marginally increased, gold plummeted nearly 60 dollars in a single day, while ETH futures trading volume hit a historical peak of 118 billion dollars. Behind this seemingly contradictory market sentiment lies a complex game of inflation stickiness, political intervention, and asset rotation.
VX: TZ7971
CPI Data Outlook
The market generally expects the July CPI year-on-year increase to fall in the 2.7%-2.8% range, slightly higher than June's 2.7%, while the core CPI year-on-year may rise to 3.0% (the highest growth rate in six months). This prediction is based on two contradictory factors: on one hand, weak energy prices (oil fell in July) suppress overall inflation; on the other hand, the transmission effect of tariffs on core goods continues to ferment, with prices of import-intensive goods like furniture and clothing driving up core inflation.
If the data unexpectedly falls below 2.7%, it may be seen as a signal of "tariff desensitization", triggering a rebound in risk assets; conversely, if it breaks through 2.8%, it will reinforce market concerns about "stagflation structural solidification".
For the Federal Reserve, this data directly determines the legitimacy of the September rate cut. Although the non-farm employment data suddenly cooled (only 73,000 added in July, with the previous two months revised down by 258,000), the stubbornness of core inflation forces the Fed to make a difficult choice between "protecting employment" and "preventing inflation".
The probability of a September rate cut has fallen from 90% a week ago to 84.9%, reflecting the market's cautious attitude towards inflation data.
Crypto Market Frenzy
While traditional markets hesitate, cryptocurrencies are experiencing a violent surge. CME ETH futures trading volume in July soared to 118 billion dollars, a month-on-month surge of 82%; outstanding contracts simultaneously grew by 75% to 5.21 billion dollars, indicating a sharp increase in institutional allocation demand for ETH.
Spot prices broke through 4,360 dollars in the early morning of August 12, creating a new high since December 2021, though it later fell back to around 4,200 dollars, still only about 14% away from its historical peak.
Coinglass data shows that if ETH price breaks through 4,000 dollars, it may accumulate short liquidation of 1.8 billion dollars
Tonight's Eye of the Storm: Three Scenario Simulations and Asset Paths
Scenario 1: CPI below 2.7% (20% probability)
Market Reaction: Risk assets celebration. US stocks and cryptocurrencies surge, gold rebounds
Federal Reserve Impact: September rate cut probability rises above 90%, may initiate a continuous rate cut cycle
Key Logic: Data verifies "tariff desensitization", alleviates stagflation concerns
Scenario 2: CPI between 2.7%-2.8% (70% probability)
Market Reaction: Oscillating differentiation. US dollar and US bonds volatility intensifies, Bitcoin may outperform ETH
Federal Reserve Impact: September rate cut probability remains around 80%, but December's second rate cut is questionable
Key Logic: Policy game dominates the market, focus on emergency statements from Federal Reserve officials
Scenario 3: CPI exceeds 2.8% (10% probability)
Market Reaction: Risk-averse mode activated. US dollar surges, gold briefly spikes, crypto assets plummet
Federal Reserve Impact: Rate cut probability plummets to 50%, Powell faces direct pressure from Trump
Key Logic: Stagflation trading returns, long-term assets face sell-off
