Crypto Market Diverges Amid Global Macro Uncertainty

The global macro trading narrative this week centered on the 'marginal cooling of U.S. inflation and weakening consumption, but energy shocks making it difficult for monetary policy to shift towards easing.'

U.S. CPI rose 0.1% month-on-month in July, with the year-on-year rate dropping from 3.5% to 3.4%, and core CPI year-over-year falling from 2.6% to 2.5%, indicating that underlying inflation continues to decline slowly.

Meanwhile, July retail sales unexpectedly fell 0.6% month-on-month, combined with previously weak employment data, suggesting U.S. demand and labor market momentum are weakening.

The situation in the Middle East and supply disruptions in the Strait of Hormuz remain the biggest macro variables: the IEA further lowered its global oil demand and supply forecasts for 2026, global inventories have significantly decreased, and this week WTI and Brent closed at approximately $82.40 and $88.52, respectively, with weekly increases of about 5.4% and 5.9%, leading to renewed input inflation pressure from energy prices.

The Federal Reserve is currently in a typical dilemma of 'growth cooling but inflation still above target,' maintaining the federal funds rate at 3.50% - 3.75% during the July meeting, with significant internal disagreement on whether further rate hikes are necessary; after the release of inflation and consumption data this week, U.S. Treasuries and the dollar weakened temporarily, but the 10-year Treasury yield ultimately remained around the high of approximately 4.70%.

The macro environment this week does not conform to the traditional notion of 'inflation reduction → interest rate cuts,' but is closer to a gradual slowdown in growth, improvement in core inflation, while energy and geopolitical risks keep global interest rates elevated in a stagflation-like pull.